Suppose that the percentage change in supply is 20%, the price elasticity of supply is 2, and the percentage change in the equilibrium price is 4%. What is the price elasticity of demand?
A. 0
B. 1
C. 2
D. 3
Answer: D
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Suppose Lisa spends all of her money on books and bagels, and a bagel is an inferior good for her. When the price of coffee increases, the
A) consumption of coffee will fall. B) consumption of coffee will rise. C) consumption of coffee will not change. D) Not enough information.
A minimum wage law might increase wages without reducing employment if the hiring firm is
A. in perfect competition. B. a monopolist. C. a monopolistic competitor. D. a monopsonist.
Discuss the concept of the globalization of production.
What will be an ideal response?
Which of the following companies would gain from foreign currency depreciation?
A. Companies that borrow in foreign currency. B. Companies that export goods and services. C. Companies that invest in the foreign equity markets. D. Companies that buy bonds issued by the foreign government.