If the number of close substitutes of a good increases, _____
a. the elasticity of demand for the good decreases
b. the elasticity of demand for the good increases
c. the elasticity of demand for the good becomes zero
d. the elasticity of demand for the good remains unaffected
b
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Which of the following statements is TRUE?
A) As a result of specialization some workers will be displaced and harmed in the short run by free trade. B) Free trade leads to lower wages for all workers in both nations. C) Specialization will result in a decline in an industry and none of those workers will be able to find other jobs. D) Free trade will benefit all workers in a nation equally.
"Reciprocity pacts" started springing up in the
A) 1920s. B) 1950s. C) 1960s. D) 1980s.
Because monopolists are protected by high barriers to entry, they:
a. may be able to earn long-run economic profits. b. will not minimize the per-unit cost of producing their output. c. will price their product at the highest possible price. d. seek economic profit; however, they are not able to earn it in the long run.
If the demand increases in a perfectly competitive market, firms will likely:
A. set prices artificially higher permanently. B. have to engage in more advertising in order to further stimulate the increase in demand. C. enter the market in hopes of capturing some profits. D. experience a loss due to increased competition.