If marginal revenue equals zero, then demand at this level of output is
A) perfectly inelastic.
B) inelastic.
C) unit elastic.
D) elastic.
C
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"As the price of gasoline increases, fewer people buy cars that are gas guzzlers." A graph showing this relationship would have
A) a negative slope. B) a positive relationship. C) a direct relationship. D) a horizontal line.
Steel production creates pollution. If a tax is imposed on steel production equal to the marginal external cost of the pollution it creates, ______
A. steel producers will cut pollution to zero B. the deadweight loss created by steel producers will be cut to zero C. the market price of steel will rise by the amount of the tax D. steel producers will continue to produce the inefficient quantity of steel
When the extraordinary failures of S&Ls drove FSLIC into financial crisis, the
a. government diverted taxes from funding government projects to support the FSLIC b. government created the FDIC to replace the FSLIC c. government created the Resolution Trust Corporation to handle the crisis d. Federal Reserve permanently lowered the discount rate which relieved FSLIC of financial pressure e. Treasury Department issued bonds to cover FSLIC losses
Exhibit 4-3 Supply and demand curves
In Exhibit 4-3, which of the following might cause a shift from S2 to S1?
A. A decrease in input prices. B. A decrease in technology. C. An increase in input prices. D. An increase in consumer income.