What is the shape of a perfectly elastic demand curve? Explain its significance for a seller.
What will be an ideal response?
The perfectly elastic demand curve is horizontal and parallel to the X axis. A slight increase in the price will drop the quantity demanded to zero. It means that the seller will lose all of her customers if she raises the price even slightly.
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Which of the following inputs can be changed in the short run?
A) Machinery B) Land owned C) Office Space D) Labor employed
Economist's can justify supporting education through taxation on which of the following grounds?
A) Education generates spillover benefits. B) Low-income people could not otherwise afford education. C) Most economists are educators. D) Free education extends equal opportunity to all. E) Public education is more efficient than allowing education to be provided by the market.
In 2007, interest rates in Germany were 4.7 percent while the inflation rate was 1.7 percent. In 2008, interest rates increased to 5.3 percent and the inflation rate increased to 2.0. As a result, there is
A) a leftward shift in Germany's demand for money curve. B) a downward movement along Germany's demand for money curve. C) a rightward shift in Germany's money supply curve. D) an upward movement along Germany's demand for money curve.
The Federal Reserve considers any business with less than __________ employees to be "small."
A) 10 B) 100 C) 500 D) 1500