If resources A and B are complementary and employed in fixed proportions:
A. a change in the price of A will have no effect on the quantity of B employed.
B. an increase in the price of A may either increase or decrease the demand for B.
C. an increase in the price of A will increase the demand for B.
D. an increase in the price of A will decrease the demand for B.
Answer: D
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Economies of scale will lead to only one firm in the industry because
A) by increasing output a firm is able to lower the cost per unit and charge lower prices driving smaller firms out of business. B) one firm has an average cost curve, which has shifted below the average cost curves of its competitors. C) there are governmental entry restrictions. D) of government licensing.
Income elasticity of demand measures how
a. the quantity demanded changes as consumer income changes. b. consumer purchasing power is affected by a change in the price of a good. c. the price of a good is affected when there is a change in consumer income. d. many units of a good a consumer can buy given a certain income level.
A recessionary gap exists if (actual) Real GDP is __________ Natural Real GDP
A) less than B) greater than C) equal to D) b and c E) none of the above
A firm in a perfectly competitive market:
A. must take the price that is determined in the market. B. must reduce its price if it wants to sell a larger quantity. C. must be large relative to the total market. D. can exert a major influence on the market price.