Answer the following statement true (T) or false (F)
1) A linear demand curve has a constant elasticity over the full range of the curve.
2) The greater the ease of shifting resources from product X to product Y in the production
process, the greater is the elasticity of supply of product Y.
3) If the elasticity coefficient of supply is 0.7, supply is elastic.
4) Antiques tend to have highly inelastic supply curves.
1) F
2) T
3) F
4) T
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Water is plentiful in most of the world, so its price and total utility are low
a. True b. False Indicate whether the statement is true or false
A profit-maximizing firm will increase its use of capital and decrease its use of labour when the:
a) marginal product of capital is higher than the marginal product of labour. b) marginal product of capital, per dollar spent on capital, is less than the marginal product of labour, per dollar spent on labour. c) average product of capital is higher than the average product of labour. d) total product of capital is higher than the total product of labour. e) marginal product of capital, per dollar spent on capital, is greater than the marginal product of labour, per dollar spent on labour.
In Figure 9.2, if the consumption function shifts from C2 to C1, autonomous consumption
A. Decreases, and aggregate demand shifts to the left. B. Decreases, and aggregate demand shifts to the right. C. Increases, and aggregate demand shifts to the left. D. Increases, and aggregate demand shifts to the right.
The Herfindahl-Hirschman Index is
A. calculated as the sum of the market shares for all firms in the industry. B. calculated as the sum of the market shares of the top four firms. C. calculated by summing the squared market share percentages for all firms in the industry. D. not used by the government in considering mergers.