When Joe's Gas raises its price for regular unleaded gasoline, total revenue from regular unleaded gas falls to zero. It must be the case that
A. there are not many good substitutes for Joe's regular unleaded gasoline.
B. the demand for Joe's regular unleaded gasoline is perfectly elastic.
C. the demand for Joe's regular unleaded is inelastic.
D. consumers are switching to premium grades of gasoline.
Answer: B
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Exhibit 7-16 Short-run cost curves for a competitive firm
?
In Exhibit 7-16, if the market price of its product is $50 per unit, then the firm will:
A. break even. B. shut down. C. exit the industry. D. earn a positive economic profit.
The balance of payments constraint refers to the limits on:
A. exchange rate policy imposed by flexible exchange rates. B. currency convertibility observed in most developing countries. C. domestic macroeconomic policy, arising from a shortage of international reserves. D. macroeconomic policy resulting from IMF conditionality.
Sellers will opt out of markets in which
What will be an ideal response?
Which of the following will cause the money multiplier to become smaller?
A) an increase in high powered money B) a decrease in the ratio of reserves to checkable deposits C) an increase in the public's preference for checking deposits as opposed to holding currency D) a reduction in high powered money E) none of the above