How does the concept of elasticity allow us to improve upon our understanding of supply and demand?
a. Elasticity allows us to analyze supply and demand with greater precision than would be the case in the absence of the elasticity concept.
b. Elasticity provides us with a better rationale for statements such as "an increase in x will lead to a decrease in y" than we would have in the absence of the elasticity concept.
c. Without elasticity, we would not be able to address the direction in which price is likely to move in response to a surplus or a shortage.
d. Without elasticity, it is very difficult to assess the degree of competition within a market.
a
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If a firm hires workers up to the point where the value of their marginal product equals their wage, then the firm is
a. minimizing labor costs. b. maximizing profit. c. maximizing the MP of labor. d. minimizing average costs.
Describe how a sudden stop leads to a financial crisis
What will be an ideal response?
Aggregate supply denotes the relationship between the __________________ that firms choose to produce and sell and the _________________, holding the price of inputs fixed.
a. total quantity; price level for output b. type of goods; input price of raw materials c. price of goods; number of employees d. total inputs; types of goods
Menu costs in relation to inflation refer to:
a) Costs of finding better rates of return b) Costs of altering price lists c) Costs of money increasing its value d) Costs of revaluing the currency