A decrease in demand will decrease prices most when supply is
A. inelastic (but not perfectly inelastic).
B. perfectly inelastic.
C. elastic.
D. unit elastic.
Answer: B
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Suppose that the equilibrium price and quantity of new houses both increase. Which of the following could be a cause of this change?
A) The wage paid carpenters who build new houses might have risen. B) A technological advance in framing a new house might have occurred. C) The rent for nearby apartments might have fallen. D) More home buyers might have moved into the area. E) The cost of wood framing used to build houses might have fallen.
An argument in favor of fractional-reserve banking is that
A) unregulated institutions would be riskier than regulated fractional-reserve banks. B) it increases the precision of the central bank's control over the quantity of money. C) a bank deposit is owned by the depositor, so the bank has no legal right to lend the deposit to someone else. D) it decreases the risk of a bank running out of cash.
The return to the entrepreneur for organizing, producing, and risk-taking in the operation of the business is
a. rent. b. equal to total revenue. c. equal to total cost. d. total profit.
Which of the following factors makes the success of economic integration more likely?
(a) Nationalism. (b) Desire for prestige projects. (c) Diverse economic systems. (d) All of the above. (e) None of the above.