Suppose that the demand for light bulbs is inelastic, and the supply of light bulbs is elastic. A tax of $2 per bulb levied on light bulbs will increase the price paid by buyers of light bulbs by
a. less than $1.
b. $1.
c. between $1 and $2.
d. $2.
c
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If the price elasticity of demand for gasoline is 0.8 and the price elasticity of demand for plane tickets is 2.2 then the demand for gasoline is ________ and the demand for plane tickets is ________
A) elastic; inelastic B) inelastic; elastic C) elastic; elastic D) inelastic; inelastic
Since the demand curve faced by a monopolistically competitive firm is downward sloping,
a. the firm is a price-taker in the short run b. in the long run there will be excess capacity c. the output decisions of one firm will influence profits of all other firms d. the product in the market is viewed by consumers as being standardized e. the ATC curve is U-shaped
When a U.S. firm engages in outsourcing, it benefits ________ and harms ________.
A. the U.S. consumers of the firm's products; the firm's U.S. employees B. the U.S. consumers of the firm's products; the firm's foreign employees C. the U.S. consumers of the firm's products; the firm D. the firm; the U.S. consumers of the firm's products
The Herfindahl index and the concentration ratio fail to give a complete picture of an economy's competitiveness because:
A. they measure each firm's share of sales rather than each firm's share of profits. B. they don't account for mergers within an industry. C. many corporations are conglomerates, spanning a variety of different industries. D. they are based on market share, not market size.