One reason the demand curve slopes ________ is that as prices fall ________.
A. upward; fewer people find that the price is now less than their reservation price.
B. downward; fewer people find that the price is now less than their reservation price.
C. downward; more people find that the price is now less than their reservation price.
D. upward; more people find that the price is now less than their reservation price.
Answer: C
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In general, the smaller the price elasticity:
a. the smaller the responsiveness of price to changes in quantity. b. the smaller the responsiveness of quantity to changes in price. c. the larger the responsiveness of price to changes in quantity. d. the larger the responsiveness of quantity to changes in price.
If Q = K1/3L2 the MPL is
a. constant b. diminishing c. increasing
In terms of efficiency, any point on a production possibilities frontier is as good another
a. True b. False Indicate whether the statement is true or false
What is a shortcoming of price control legislation?
a. Price controls create surpluses. b. Price controls lower the quantity demanded. c. Price controls create shortages. d. All of the above are shortcomings of price controls.