Suppose the demand for a product is lnQxd = 10 ? ln Px, then product x is:
A. inelastic.
B. elastic.
C. unitary elastic.
D. Cannot be determined without more information.
Answer: C
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The substitution effect is a trade-off between ___________ and _________________.
Fill in the blank(s) with the appropriate word(s).
If P = Q/15 represents marginal cost for a monopolist and market supply for a competitive industry and market demand is given by Qd = 500 - 10P, the difference between the monopoly equilibrium and the competitive equilibrium is that a monopolist would produce:
A. 187.5 units of output at a price of $31.25, whereas competitive output would be 250 units at a price of $25. B. 250 units of output at a price of $25, whereas competitive output would be 300 units at a price of $20. C. 187.5 units of output at a price of $31.25 each, whereas competitive output would be 300 units at a price of $20. D. 300 units of output at a price of $20, whereas competitive output would be 187.5 units at a price of $31.25.
If the firm has many competitors, the marginal revenue curve is
A. upward sloping. B. vertical. C. flat (horizontal). D. downward sloping.
Which of the following is a category of fiscal policy?
A. government policies regarding taxation B. government policies regarding transfer payments and welfare benefits C. government policies regarding the purchase of goods and services D. all of the above