The diagram shows two product demand curves. On the basis of this diagram, we can say that:
A. over range P 1 P 2 price elasticity of demand is greater for D 1 than for D 2 .
B. over range P 1 P 2 price elasticity of demand is greater for D 2 than for D 1 .
C. over range P 1 P 2 price elasticity is the same for the two demand curves.
D. not enough information is given to compare price elasticities.
A. over range P 1 P 2 price elasticity of demand is greater for D 1 than for D 2 .
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Other things being equal, corrective taxation is superior to regulation in the long run because it _____
a. gives the producer an incentive to find a way to reduce external costs b. the tax revenue can be used as compensation c. the tax revenue can be used on other parts of the budget d. is more burdensome on the producers of the externality
A failure in coordination between workers and employers is most likely to cause an expansionary gap
a. True b. False Indicate whether the statement is true or false
It is assumed in standard economic theory that a firm makes decisions in an effort to
A) have a highly diversified product. B) become as large as possible. C) maximize its profits. D) maximize its revenue. E) be favoured politically.
What is likely to be the best approach to a recession that is expected to turn into an expansion in a short time?
(A) Do nothing and let the economy fix itself. (B) Use monetary policy to lower interest rates. (C) Use fiscal policy to lower interest rates. (D) Use monetary policy to raise interest rates.