If a two percent increase in the price of bananas leads to a two percent decrease in the quantity of bananas demanded, then the demand for bananas is

A) elastic.
B) inelastic.
C) unit-elastic.
D) perfectly inelastic.


Answer: C

Economics

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The Lorenz curve:

A. is an absolute measure of income inequality. B. is a relative measure of income inequality. C. has elements of absolute and relative measures. D. takes into account changes in the standard of living.

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A single firm that charges the monopoly price in the market earns $1,300. If another firm successfully enters the market, the incumbent's profits fall to $700 and the entrant earns $575. If the interest rate is 0.5, how high must the firm's profits from limit pricing be for limit pricing to be a profitable strategy for the incumbent?

A. ?L > $500 B. ?L > $200 C. ?L > $900 D. ?L > $1,000

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Marginal ________ is the added revenue from producing and selling one more unit of output.

A. revenue B. cost C. income D. profit

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