Draw the demand curve for a good whose price elasticity of demand is equal to zero. Be sure to label both axes. Explain what the graph represents.
What will be an ideal response?
The demand curve in the graph is a vertical line, indicating that the quantity of the good demanded will not change no matter what happens to its price. In terms of the calculation of the price elasticity of demand, the change in quantity is zero and so, therefore, is the calculated value of the price elasticity.
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Economic growth theory studies how real GDP changes ________, in other words the growth of ________ real GDP
A) on average over long periods, natural B) on average over long periods, actual C) from one year to the next, natural D) from one year to the next, actual
The maximum price that a buyer will pay for a good is called
a. consumer surplus. b. willingness to pay. c. equilibrium. d. efficiency.
As firms enter a monopolistically competitive market in the long run:
A. price increases, the market quantity demanded increases, and the quantity supplied by an individual firm increases. B. price decreases, the market quantity demanded increases, and the quantity supplied by an individual firm decreases. C. price decreases, but firm profits increase as average costs decrease. D. price increases and firm profits increase.
Suppose the government runs a budget surplus in a given year. It can reduce its overall federal debt by:
A. not buying anything on credit. B. buying back bonds it sold to the public. C. forcing a change in net exports. D. increasing taxes on luxury items.