If consumers won't pay more than $1.50 for a pack of gum and at $1.50 they will buy an almost infinite amount, price elasticity of demand at $1.50 is:
A. elastic.
B. inelastic.
C. perfectly inelastic.
D. perfectly elastic.
Answer: D
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Marginal cost is defined as
a. the additional cost attributable to the last unit produced. b. the change in fixed costs associated with the production of one more unit of output. c. the difference between total revenue and total cost. d. price times quantity.
Suppose the government increases government spending and increases taxes by the same amount to pay for it. We would predict ________.
A. real GDP will increase B. the effect on real GDP depends on the size of the MPC C. real GDP will fall D. real GDP will not change
Refer to the scenario above. If they are the only bidders in the auction and each bidder bids up to his value for the good, the winner will earn a surplus of ________
A) $500 B) $625 C) $125 D) $150
A decrease in German residents' willingness to invest in dollar-denominated assets will shift the demand curve for
A. dollars to the left. B. euros to the left. C. dollars to the right. D. euros to the right.