The demand for a product is likely to be more elastic when
a. the share of the total budget spent on the product is small.
b. more complementary products are available.
c. the consumer has a short time to adjust to price changes.
d. more good substitutes for the product are available.
D
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Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that Joe's marginal cost of staying open per hour is $24
How many hours should Joe stay open? A) 3 hours B) 4 hours C) 5 hours D) 6 hours
The monopoly can shift the demand for its product rightward by
A) accommodating entry. B) advertising new uses for its product. C) moving along the learning curve. D) All of the above.
The Social Security system is a(n)
A) ad valorem system. B) ability to pay system. C) progressive tax system. D) pay-as-you-go system.
One hundred basis points could be expressed as:
A. 1.00% B. 0.01% C. 100.0% D. 0.10%