If the elasticity of demand for cigarettes is 0.4, then an increase in the price of a pack of cigarettes from $5.00 to $6.00 would reduce quantities demanded by about
a. 7 percent.
b. 40 percent.
c. 42 percent.
d. 220 percent.
a
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When the government grants an inventor a patent
A) he has the exclusive right to make, sell or use his invention for 5 years. B) the protection of a current invention would increase spending on R&D. C) the patent holder has less incentive to invest in R&D because one successful invention removes the need to develop others. D) the patent holder is guaranteed a profit on his invention.
In the foreign exchange market, which of the following shifts the supply curve of dollars leftward?
A) The current exchange rate falls. B) The expected future exchange rate falls. C) The current exchange rate rises. D) The expected future exchange rate rises. E) None of the above answers is correct.
Suppose there are ten people playing cards in a room. One of them wants to smoke a cigar, nine of them dislike the smell of cigar smoke. The smoker values the privilege of smoking at $5, and each of the other nine people of the room would be willing to pay fifty cents for clean air in the room. The rules governing use of the room state that smoking is not allowed unless everyone agrees to allow smoking. If all ten people can negotiate with each other at no cost, then the Coase theorem predicts that if the cigar smoker has the right to determine whether smoking is allowed, then there ________ be smoking, and if the other nine people in the room have the right to determine whether smoking is allowed, then there ________ be smoking.
A. will; will B. will not; will not C. will; will not D. will not; will
Many hotel chains offer senior citizen discounts to members of AARP. This suggests that the hotels believe that senior citizens have a ________ demand for hotel rooms than non-seniors.
A. smaller B. greater C. more elastic D. less elastic