Calculate the elasticity of supply when an increase in demand causes the equilibrium price and quantity to change from $2.00 and 500 to $2.80 and 1,000, respectively
Elasticity of supply = Percentage change in quantity supplied/Percentage change in price. Using the average quantities and average prices to calculate elasticity, we obtain: an elasticity of 2.0.
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Lizzie's budget line is shown in the figure above. Lizzie's real income in terms of magazines is ________ magazines
A) 5 B) 10 C) 15 D) 20
When a perfectly competitive, well-functioning market is not in equilibrium:
A. total surplus is not maximized. B. there are no exchanges that can make some better off without someone becoming worse off. C. the market is efficient. D. All of these are true.
In the aggregate demand/aggregate supply model, a country's full-employment real GDP is represented by:
a. prices. b. aggregate demand. c. aggregate supply. d. an increase in the general level of prices.
Which of the following is true under natural monopoly?
A. The marginal cost curve will be equal to the average cost curve. B. The monopolist will set price equal to marginal cost and will earn economic profits. C. Economies of scale exist. D. Output is produced under conditions of constant cost.