The price elasticity of demand is a measure of the
A. relationship between price and profitability.
B. sensitivity of a good's price to changes in demand.
C. responsiveness of buyers of a good to changes in its price.
D. effect of changes in demand on the price.
Answer: C
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According to the real business cycle theory, which of the following is a TRUE statement about the effects of an oil shock in the 1970s?
A) Relative prices changed but there was no impact on the price level in general. B) The natural rate of unemployment remained unchanged, but employment levels did decline. C) The shock shifted the short-run aggregate supply curve but not the long-run aggregate supply curve. D) The shock affected real variables only and did not affect nominal variables.
There are two firms that compete against each other and each needs to decide if they will undertake research and development to improve their product
The payoffs are as follows: If Firm 1 does undertake R&D then Firm 2 will earn $25 million if they also do R&D or $50 million if not If Firm 1 does not undertake R&D then Firm 2 will earn $2 million if they do R&D or $0 million if not If Firm 2 does undertake R&D then Firm 1 will earn $10 million if they also do R&D or $20 million if not If Firm 2 does not undertake R&D then Firm 1 will earn $2 million if they do R&D or $0 million if not Regarding this game, which of the following is TRUE? A) Only one will do R&D but we cannot say which one. B) Both firms will do R&D. C) Both firms will not do R&D. D) Firm 1 will do R&D and Firm 2 will not.
Of the following, consumer surplus is largest for
A) a perfectly competitive industry. B) a single-price monopoly. C) any price-discriminating monopoly. D) a perfectly price-discriminating monopoly.
Please use a figure to discuss whether or not a devaluation under a fixed exchange rate has the same long-run effect as a proportional increase in the money supply under a floating rate
What will be an ideal response?