Refer to the graph shown. The elasticity of demand is closest to 1 on line segment:
A. BC.
B. CD.
C. AB.
D. The elasticity is not close to 1 on any of these line segments.
Answer: A
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A monopolistically competitive industry has
A. a differentiated product and barriers to exit and entry. B. a differentiated product and ease of exit and entry. C. identical products and barriers to exit and entry. D. identical products and ease of exit and entry.
If a country is running a current account deficit year after year, what should we expect to happen to the exchange rate for that country? Explain.
What will be an ideal response?
What are substitute goods, and how does a change in the price of one substitute good influence the demand for the other?
What will be an ideal response?
Refer to the graph shown. The economy begins at a level of output of $50 billion and experiences a one year recession in which output declines by 3 percent. What is output in year 1?
A. $51.5 billion B. $48.5 million C. $15 billion D. $1.50 billion