Which of the following is an accurate comparison between long-run elasticities of demand and short-run elasticities of demand?
a. Long-run price elasticities of demand are greater than short-run price elasticities of demand mainly for luxury items.
b. Long-run price elasticities of demand are equal to short-run price elasticities of demand EXCEPT for expensive items.
c. Long-run price elasticities of demand are greater than short-run price elasticities of demand for most products.
d. Long-run price elasticities of demand are less than short-run price elasticities of demand for inexpensive items.
c. Long-run price elasticities of demand are greater than short-run price elasticities of demand for most products.
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If the absolute value of the price elasticity of demand for a good is .75, the demand for that good is described as
A. inferior. B. normal. C. inelastic. D. elastic.
To maximize its profit, the firm in the figure above produces ________ cans per day and ________
A) 0; incurs an economic loss of less than $20 B) between 3 to 5 cans; earns a normal profit C) 10; earns an economic profit of $2.90 D) 10; earns an economic profit of $29 E) more than 10; earns an economic profit
An argument in favor of fractional-reserve banking is that
A) unregulated institutions would be riskier than regulated fractional-reserve banks. B) it increases the precision of the central bank's control over the quantity of money. C) a bank deposit is owned by the depositor, so the bank has no legal right to lend the deposit to someone else. D) it decreases the risk of a bank running out of cash.
Type II errors are
a. False negatives b. False positives c. True negatives d. True positives