Electricity accounts for almost 20% of the cost of making steel. A 10% increase in electricity prices results in steel firms decreasing production and thereby demanding 5% less electricity
Over many years, technological innovations can change the way steel firms make steel and reduce the industry's energy requirements. This suggests that the steel industry's short-run elasticity of demand for electricity is probably A) less than one in absolute terms in the short run.
B) less than its long-run elasticity of demand for electricity.
C) Both A and B above.
D) Neither A nor B above.
C
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The private sector balance equals
A) saving minus investment. B) net taxes minus government expenditures. C) investment minus saving. D) net taxes plus government expenditures. E) saving plus investment.
The figure above shows Clara's demand for CDs. If the price for a CD is $15, then Clara
A) receives no consumer surplus on the 6th CD she buys. B) receives a total of $10 of consumer surplus. C) will buy no CDs. D) receives a total of $40 of consumer surplus.
An insurance company requires homeowners it insures to have smoke detectors in their homes. The insurance company is trying to combat the
A. adverse selection problem. B. the free-rider effect. C. moral hazard problem. D. "lemons" problem. E. none of the above
It is possible that an increase in wages will lead to a decrease in the quantity of labor supplied.
Answer the following statement true (T) or false (F)