Which of the following statements about the elasticity of demand for a monopolist is TRUE?
A. Since the demand curve of a monopolist is downward sloping, the demand for the good must be inelastic.
B. Since a monopolist produces a good with no close substitutes, the price elasticity of demand for the good is zero.
C. A monopolist produces a good with demand that is perfectly inelastic because people can not do without the good.
D. Since every good has some substitute, even if imperfect, the demand for a good produced by a monopolist will not have zero price elasticity.
Answer: D
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The efficient markets hypothesis predicts that an investor
A) will not be able consistently to earn above-normal profits from buying or selling stocks. B) will be able consistently to earn above-normal profits from buying or selling stocks so long as he or she makes use of rational expectations. C) will be able consistently to earn above-normal profits from buying or selling stocks so long as he makes use of adaptive expectations. D) will be able consistently to earn above-normal profits so long as stock prices in general are rising.
Stocks are
A) promises to repay loans. B) a liability of a proprietorship. C) a liability of a corporation. D) shares of ownership in a corporation.
Economic models are often expressed in
A. equations. B. words. C. graphs. D. physical objects.
The economy's self-correcting mechanism is such that demand shocks are offset in the long run by shifts of aggregate supply and supply shocks are offset by shifts of aggregate demand
a. True b. False