A value of the absolute price elasticity of demand equal to 0.25 indicates that
A) a 10% decrease in price leads to a 4% increase in quantity demanded.
B) a 10% decrease in price leads to a 25% increase in quantity demanded.
C) a 1% decrease in price leads to a 2.5% increase in quantity demanded.
D) a 0.25% decrease in price leads to a 1% increase in quantity.
Answer: A
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Which of the following episodes would most likely contain an externality?
A) You cannot afford to buy groceries. B) You decide to grow your own vegetables in your backyard where no one else can see them. C) You decide to grow flowers in your front yard where everyone else can see them. D) You eat all the vegetables you grow yourself.
Two economists from Northwestern University estimated the benefit households received from subscribing to broadband Internet service. The economists found that
A) the average consumer of broadband Internet service received a marginal benefit equal to $36. B) one month's benefit to consumers who subscribe to broadband Internet service is about $890 million. C) most consumers of broadband Internet service were not willing to pay more than $36 per month. D) the consumer surplus from dial-up Internet service exceeded the consumer surplus from broadband Internet service.
The principle of comparative advantage states that total output is greatest when each product is made by the country that has the _____________.
Fill in the blank(s) with the appropriate word(s).
There are several motives for holding assets in the form of money. What are they? Provide an example of each