When demand is elastic, an increase in price causes the seller's total revenue to:
A. decrease.
B. increase.
C. fall to zero.
D. remain the same.
A. decrease.
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Because of the productivity slowdown in the United States from the mid-1970s through the mid-1990s,
A) the standard of living increased in the United States. B) real GDP per capita grew more rapidly. C) real GDP per capita grew more slowly. D) the standard of living did not change.
If aggregate expenditure is less than GDP, then inventories rise and GDP falls
Indicate whether the statement is true or false
Assuming pure competition, which of the following are equivalents?
A. MRP L /P L = MRP C /P C and P x = 1/MC. B. MRP L /P L = MRP C /P C and P x = AVC. C. P x = MC and MRP L /P L = MRP C /P C = 1. D. P x = MC and MP L /P L = MP C /P C
In which of the following situations is the absolute price elasticity of demand for an item most likely to exceed a value of 1?
A) when there are very few close substitutes for the item B) when there are very few producers of the item C) when the item's share of expenses in consumers' budgets is very small D) when there is considerable time to adjust to a change in the price of the item