If supply is perfectly inelastic, the price elasticity of supply is equal to:
A. 1.
B. 0.
C. infinity.
D. a negative number between 0 and infinity.
Answer: B
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The monetarists believe that the LM schedule
a. and the IS schedule are both steep. b. is flat while the IS schedule is steep. c. and the IS schedule are both quite flat. d. is steep and the IS schedule is relatively flat.
The difference between the maximum price the consumer is willing to pay and the price the consumer actually pays for a product is referred to as: a. market surplus
b. market shortage. c. consumer surplus. d. producer surplus.
Ingrid's Ice cream Parlor has an own price elasticity of 5 . It has an approximate share of 10% in the market for ice cream. What is the aggregate own price elasticity of the market?
a. 0.1% b. 0.5% c. 0.7% d. 1%
Output for a simple production process is given by Q = 2KL, where K denotes capital, and L denotes labor. The price of capital is $25 per unit and capital is fixed at 8 units in the short run. The price of labor is $5 per unit. What is the variable cost of producing 80 units of output?
A. $25 B. $85 C. $33 D. $200