What is the shape of a perfectly elastic demand curve? Explain its significance for a seller
The perfectly elastic demand curve is horizontal and parallel to the X axis. A slight increase in the price will drop the quantity demanded to zero. It means that the seller will lose all of her customers if she raises her price even slightly.
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Education is a ________ good that creates a ________ externality.
A. private; positive B. private; negative C. public; positive D. public; negative
The slope of the isoquant is
A. negative. B. the marginal rate of technical substitution. C. -MPL/MPK. D. All of the above are correct.
According to Keynesian economic theory, the government should spend money to pay down the national debt.
a. during an economic depression. b. in order to balance the budget. c. only if it is willing to raise taxes. d. on the military instead of on domestic issues.
A major reason why it is difficult to lower the barriers to free trade is
A) that total benefits are less than total costs from free trade. B) the uneven distribution of gains and losses from free trade. C) the loss of jobs without any gain of jobs from free trade. D) the inability to compensate losers from free trade. E) that the barriers allow us to compete with cheap foreign labor.