If the demand curve for a product is vertical, then
A. the price elasticity of the product approaches zero.
B. the demand for the product is elastic.
C. only a certain amount of the product will be consumed if the price falls to zero.
D. the demand for the product is perfectly elastic.
Answer: A
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An autonomous depreciation of the U.S. dollar makes American goods ________ relative to foreign goods and results in a ________ in U.S. net exports, everything else held constant
A) cheaper; decline B) cheaper; rise C) more expensive; decline D) more expensive; rise
When economies of scale are present,
a. costs per unit decline as output expands. b. the government feels responsible for breaking up the firm. c. firms always make handsome profits. d. costs fall as the size of the product is increased.
If a firm's price-earnings ratio is relatively low, then it might be an indication that
a. the demand for the stock is relatively high. b. the supply of the stock is relatively low. c. people expect the firm's earnings to rise. d. people expect the firm's earnings to fall.
Once we enter the region of diminishing returns, total variable cost
A. decreases at a decreasing rate. B. decreases at an increasing rate. C. increases at a decreasing rate. D. increases at an increasing rate.