When the consumer spends a small portion of his income on a good, demand will be
A. elastic.
B. unit-elastic.
C. inelastic.
D. elastic, unit-elastic or inelastic depending upon supply.
Answer: C
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If the initial distribution of labor and capital is Pareto optimal, which of the following statements is TRUE?
A) It is possible to reallocate labor and capital across industries so as to increase the production of one good without decreasing the production of another good. B) It is possible to reallocate labor and capital across industries so as to increase the production of one good, but only by reducing the production of another good. C) It is possible to reallocate labor and capital across industries so as to increase the production of every good. D) none of the above
Price discrimination
a. may lead to greater output. b. always leads to a reduction of output. c. leads to lower profits for the firm. d. causes firms to operate at a higher cost.
The demand for borrowed funds is a derived demand
a. True b. False Indicate whether the statement is true or false
If the dollar-yen exchange rate changes from $1 = 125 yen to $1 = 100 yen, then
a. exports to Japan will likely decrease. b. Japanese tourists will be more likely to visit the United States. c. U.S. businesses will be more likely to use Japanese shipping lines to transport their products. d. U.S. consumers will be more likely to buy Japanese-made automobiles.