If a 5 percent increase in price results in a 3 percent increase in the quantity supplied, the elasticity of supply is
A) 0.30.
B) 0.60.
C) 1.20.
D) 1.66.
B
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An increase in consumer spending caused by an increase in consumer confidence would cause
A) the aggregate demand curve to shift up and to the right. B) the aggregate demand curve to shift down and to the left. C) a movement down and to the right along the aggregate demand curve. D) a movement up and to the left along the aggregate demand curve.
A firm, such as a public utility, which is the sole producer in a market in which the government determines prices and standards of service, is known as a(n):
a. local monopoly. b. natural monopoly. c. regulated monopoly. d. oligopoly. e. monopolistically competitive firm.
Which one of the following will not cause the production possibilities curve to shift outward?
a. improvements in the stock of land b. increased educational opportunities c. a very low birth rate d. increased entrepreneurial activity
Which one of the following statements is NOT true?
A. A firm that chooses to cheat on a price-fixing scheme should consider the short-term gain in profits from cheating versus the long-term loss in profits from being punished. B. The duopoly-pricing strategy leads to negative economic profits. C. Cartels may break down because of the incentive to cheat. D. Price leadership arrangements are an implicit price-fixing scheme.