Which of the following would most likely exhibit the highest price elasticity of demand?
A. salt
B. Colgate toothpaste
C. gasoline
D. motor oil
Answer: B
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Why would a policymaker risk inflation if workers can just renegotiate their wages?
A) There is a change that workers will not fully anticipated the impact of the policy. B) The policymakers want to look like they are actively involved in the economy. C) Inflation is not a high price to pay in the economy. D) The policymakers do not believe that the workers can renegotiate.
If you advertise and your rival advertises, you each will earn $3 million in profits. If neither of you advertises, you will each earn $7 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $10 million and the non-advertising firm will earn $1 million. If you and your rival plan to hand your business down to your children, and this "bequest" goes on forever, then a Nash equilibrium when the interest rate is zero is for:
A. each firm to advertise until the rival does not advertise, and then not advertise forever. B. your firm to always advertise when your rival does, provided that the interest rate is sufficiently large. C. each firm to not advertise until the rival does, and then to advertise forever provided the interest rate is sufficiently low. D. your firm to never advertise.
Economists often treat the economy's capital stock as fixed because
A. unless the interest rate changes, the capital stock doesn't change. B. labor is a more important factor of production than capital, so economists ignore capital. C. it takes a long time for new investment and the scrapping of old capital to affect the overall quantity of capital. D. there is very little capital in the economy compared with the amount of labor.
Which union status provides the weakest form of union security?
A. Open shop B. Agency shop C. Union shop D. Closed shop