Which of the following statements is true?
A) Under monopoly, the seller sets the price of its good below marginal costs.
B) Under perfect competition, sellers set the price of their goods below marginal costs.
C) Under monopoly, prospective buyers may not be able to buy a good even if they have a willingness to pay above marginal costs.
D) Under perfect competition, prospective buyers may not be able to buy a good even if they have a willingness to pay above marginal costs.
C
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Which of the following describes a situation in which demand must be elastic?
a. The price of pens rises by 10 cents, and quantity of pens demanded falls by 50. b. The price of pens rises by 10 cents, and total revenue rises. c. A 20 percent increase in the price of pens leads to a 20 percent decrease in the quantity of pens demanded. d. Total revenue does not change when the price of pens rises. e. Total revenue decreases when the price of pencils rises.
Which of the following combinations of goods is in line with a cross-price elasticity equal to zero?
A) Pancakes and maple syrup B) Kentucky fried chicken and Dove deodorant C) Pepsi and Dr. Pepper D) None of the above
Related to the Economics in Practice on p. 105: Researchers found that after a few years of a tax relief policy for foreigners, the fraction of foreigners in the top 0.5 percent of income earners in Denmark almost doubled. The researchers concluded that for this group of workers, labor supply seems to be
A. elastic. B. perfectly inelastic C. inelastic. D. unit elastic.
When bankers hold excess reserves:
A. The size of the monetary multiplier increases B. The money-creating potential of the banking system increases C. The money-creating potential of the banking system decreases D. There is no change in the money-creating potential of the banking system