When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent. In this range of prices, demand for this product is:
A. inelastic.
B. elastic.
C. cross-elastic.
D. unitary elastic.
Answer: B
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A firm bought a pizza oven for $13,500 and if it shut down now, could sell the oven for $9,500. Which of the following statements is TRUE?
A) The relevant cost of the oven when considering shutting down is $13,500. B) The relevant cost of the oven when considering shutting down is $9,500. C) The relevant cost of the oven when considering shutting down is $4,000. D) The cost of the oven does not matter when deciding whether or not to shut down.
A clean environment is healthier than a polluted environment. Use the law of increasing costs to explain why even environmentalists might not advocate laws banning all pollution
For a given price level, the aggregate expenditure line relates unplanned spending to the level of government investment in the economy
Indicate whether the statement is true or false
Suppose quantity demanded is given by Qd = 100-P, and quantity supplied is given by Qs = 20 + 3P. In this case, equilibrium price, P*, and equilibrium quantity, Q*, are as follows:
A. P* = 10, Q* = 90 B. P* = 80, Q* = 20 C. P* = 20, Q* = 80 D. P* = 40, Q* = 140