Why is the price elasticity of demand a relative measure? That is, why is elasticity measured in percentage terms rather than in absolute terms?
A) So the coefficient of elasticity will not be dependent on the physical units of the good.
B) Because absolute measures do not account for the direction of the change in quantity.
C) So that the coefficient of elasticity will not be negative.
D) Because the absolute price or quantity demanded of a product is irrelevant to the elasticity measure.
A
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If there are five firms in an industry, each with a market share of 20 percent, the Herfindahl-Hirschman Index (HHI) of concentration is
A) 2000. B) 400. C) 100. D) 20.
Which of the following is a valid difference between sole proprietorship and partnership?
a. Partnerships require a written agreement while sole proprietorships do not. b. Partnerships require a state charter while sole proprietorships do not. c. Partnerships generate lower profits than sole proprietorships. d. Partnerships are characterized by unlimited liability, while sole proprietorships are not. e. Partnerships consist of two or more partners sharing the responsibility of the firm, while sole proprietorship consists of a single individual.
During the 1990s, which of the following did NOT occur?
A) Private savings fell. B) Investment rose. C) The United States received capital inflows. D) Private savings was greater than investment for most of the 1990s.
Refer to the diagram and assume the economy is operating at equilibrium point w. In the short run, a decrease in the price level from P 2 to P 1 would move the economy from point w to point:
A. v.
B. x.
C. t.
D. y.