Assume that the coefficient of elasticity of product demand is 0.5 in industry A and is 3.2 in industry B. Other things equal, labor demand will be:
A. more elastic in industry A than in B.
B. relatively elastic in both industries A and B.
C. more elastic in industry B than in A.
D. relatively inelastic in both industries A and B.
Answer: C
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The economy's ability to coordinate economic activity is hindered by
A) auction prices. B) workers whose wages change quickly. C) sticky wages causing sticky prices. D) all of the above.
Refer to Table 9-11. If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many clocks will Denmark gain compared to the "without trade" numbers?
A) 30 B) 100 C) 150 D) 900
When regulators identify with the special interests of the industry they regulate, this behavior conforms with the
A) share-the-gains, share-the-pains hypothesis. B) rate-of-return hypothesis. C) lemon market hypothesis. D) capture hypothesis.
Adverse selection in insurance requires that
a. potential customers face different levels risk b. potential customers facing more risk are no more interested in purchasing insurance c. people are not risk averse d. insurers can tell higher risk people from lower risk people