Explain why the price elasticity of demand changes along a linear demand curve
What will be an ideal response?
The price elasticity of demand depends on BOTH the slope of the demand curve and on the term P/Q which changes as you move along the demand curve.
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The quantity theory of money and prices
A) is derived from the equation of exchange assuming that prices remain constant. B) shows how a change in the price level leads to a change in the money supply. C) shows how the demand for money is inversely related to the price level. D) is the hypothesis that changes in the money supply leads to proportional changes in the price level.
Consider a market consisting of seven firms with market shares of 40, 20, 10, 10, 8, 7, and 5 percent, respectively. Which of the following statements is true?
a. The four-firm concentration ratio would be 0.03. b. The Herfindahl index would be 1,000. c. The Herfindahl index would be 2,228. d. The Herfindahl index would be 1,500. e. The Herfindahl index would be 2,338.
The labor force participation rate is defined as
a) the ratio of employment to the labor force b) the ratio of the working-age population to the total population c) the ratio of employment to the total population d) the ratio of the labor force to the civilian, non-institutionalized, working-age population e) the number of hours worked per week divided by 40
In Probability of Injury (x-axis) versus Wage (y-axis) space, isoprofit curves slope upward because
A. workers are willing to accept a lower wage in exchange for a riskier work environment. B. profits are constant with respect to risk. C. the firm does not like to pay higher wages. D. profits increase with the number of workers the firm employs. E. in order to keep profits constant, a higher wage must be offset by the firm saving money by not investing as much in preventing on-the-job injuries.