Arrange the following goods from least to most elastic, explaining your ordering: gasoline, Exxon gas, Exxon gas at a particular gas station.
What will be an ideal response?
Gasoline is least elastic since there are few substitutes for the entire category of this good in the operation of cars. Exxon gas at a particular station is most elastic since one can substitute other Exxon stations or other brands of gas.
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What is the Hotelling Principle? Have resource prices behaved as the principle predicts?
What will be an ideal response?
When an individual or firm in the United States requests that a bank sell foreign exchange, the bank will probably
A) call a foreign bank and arrange a purchase. B) call the central bank and arrange a purchase. C) call another bank customer with foreign exchange holdings. D) call another domestic bank and arrange a purchase. E) call a foreign exchange broker and arrange a purchase.
Which of the following statements is correct?
A) Open market purchases are expansionary and open market sales are contractionary. B) Open market purchases are contractionary and open market sales are expansionary. C) Both open market purchases and open market sales are expansionary. D) Both open market purchases and open market sales are contractionary.
When the absolute price elasticity of demand is less than 1, demand is
A) elastic. B) unit-elastic. C) inelastic. D) undetermined without more information.