Suppose the price elasticity of demand for oil is 0.1. In order to lower the price of oil by 20 percent, the quantity of oil supplied must be increased by
A) 200 percent.
B) 20 percent.
C) 2 percent.
D) 0.2 percent.
C
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The figure above shows the market for brooms. If 800 brooms are produced,
A) consumer surplus is maximized. B) producer surplus is maximized. C) market failure and a deadweight loss occur. D) marginal cost is less than marginal benefit. E) there is no deadweight loss.
According to the law of increasing opportunity costs,
A. The more one is willing to pay for resources; the smaller will be the possible level of production. B. In order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly larger amounts of alternative goods. C. Increasing the production of a particular good will cause the price of the good to remain constant. D. None of the choices are correct.
If the absolute price elasticity of demand is 2.0, a 10 percent decrease in price will increase quantity demanded by
A) 10 percent. B) 20 percent. C) 5 percent. D) 12 percent.
Insurance companies require male drivers under age 25 to pay higher insurance rates than female drivers under age 25. Craig Raymond, however, is a safer driver than the average female driver under age 25. Craig's higher insurance rate reflects:
A. monopoly power. B. statistical discrimination. C. the insurance firm's taste for discrimination. D. human-capital discrimination.