Firms do not change prices frequently because:
A. there are legal prohibitions against doing so.
B. it is easier to change the quantity of capital used in production.
C. customers will refuse to patronize firms that change prices frequently.
D. it is costly to do so.
Answer: D
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Let's assume producers in Canada can make 200 units of beef or 50 units of oranges, and U.S. producers can make 50 units of beef or 200 units of oranges per time period
Producers in which nation have an incentive to specialize in orange production? A) The U.S. B) Canada C) Both of the above have an incentive to specialize in orange production. D) Neither of the above have an incentive to specialize in orange production.
If the price elasticity of demand for good A is -1, then a 1% increase in
A) consumer income will result in a 1% decrease in the demand for good A. B) consumer income will result in a 1% increase in the demand for good A. C) the market price of good A will result in a 1% increase in the quantity demanded of good A. D) the market price of good A will result in a 1% decrease in the quantity demanded of good A.
The price elasticity of demand is
a. irrelevant to the determination of prices, incomes, and interest rates b. indeterminate in most cases c. the percentage change in price divided by the percentage change in quantity demanded d. the percentage change in price with respect to the percentage change in quantity supplied e. the percentage change in quantity demanded divided by the percentage change in price
According to the health care life cycle, in the absence of government or employer-sponsored health coverage, workers in middle age would
A. have fewer out-of-pocket medical expenses than when they were young. B. stop paying for the catastrophic care insurance they purchased when they were young. C. save an enormous amount of money to pay for health expenses in old age. D. use the money that they saved when they were young to pay for routine medical expenses.