Refer to Figure 13-2. The marginal revenue from selling the additional unit Qb instead of Qa equals
A) the area (H - E). B) the area (G + H).
C) the area G. D) the area (E + F) - (G + H).
A
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Applying neoclassical theory to the housing market, the idea that "housing is a good investment" refers to ________
A) higher expected household income B) the inability to buy as much housing at a higher price C) an expected increase in the relative price of housing D) a decrease in the cost of building new houses
The legal transfer of chattels supports economic growth
Indicate whether the statement is true or false
One criticism of the Bertrand pricing model is that
A) the model is implausible when there is product differentiation. B) when there is an oligopoly with no product differentiation, the model's prediction is inconsistent with reality. C) the model's predicted price is solely a function of demand conditions. D) the model's predicted price is dependent on the number of firms.
Answer the following questions true (T) or false (F)
1. If the demand for a product is elastic, the quantity demanded changes by a smaller percentage than the percentage change in price. 2. If the absolute value of the price elasticity of demand for gasoline is 0.5, then a 10 percent increase in the price of gasoline leads to a 0.5 percent decrease in the quantity demanded. 3. If at a price of $10, a vendor sells 5 units of a product and at a price of $8, 6 units are sold. Using the midpoint formula, the demand for this good is inelastic.