(Appendix) A demand function that has a unitary elasticity at every point will
A. be a horizontal line.
B. be negatively sloped and a straight line.
C. have a declining slope as price falls.
D. have a positive slope when price is low.
Answer: C
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Because of increasing opportunity costs, the production possibilities frontier
A. is a straight downward-sloping line. B. at first rises, then falls eventually. C. can be either downward- or upward-sloping. D. is bowed out from (or concave to) the origin.
Some cities have a relatively high residential property tax, while others have a low residential property tax. Give an explanation for this.
What will be an ideal response?
Normative analysis focuses on statements that can be tested against real-world data
a. True b. False Indicate whether the statement is true or false
When managers of firms are given fixed salaries, which are not tied to the firm's profits, they generally put forth less effort than they otherwise would. This is an example of:
A. risk aversion. B. adverse selection. C. moral hazard. D. None of the answers are correct.