The elasticity of supply of rental units in New York City is estimated to be about 0.10. Current price restrictions (price floors) are estimated to decrease the price of rental units by 10% below equilibrium price. By how much would price and quantity supplied change if the price floors were removed from the rental unit market in New York City?
A) Price will increase by 10% and quantity supplied will increase by 1%.
B) Price will decrease by 10% and quantity supplied will increase by 1%.
C) Price will increase by 10% and quantity supplied will decrease by 1%.
D) Price and quantity supplied will increase by 10%.
A
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A legal monopoly is defined as a market where
A) only one lawyer operates. B) a legal barrier to entry exists. C) only one firm could earn a profit. D) entry and exit are legal.
Which of the following questions is of most interest for MACROECONOMISTS?
A) Why is there inflation? B) Why does the steel industry want tariffs? C) What is the appropriate stance of antitrust policy? D) Why do foreigners immigrate to the United States?
Alex and Ben are both loggers wanting to harvest timber from the same forest. Alex prefers to harvest and replant at a sustainable rate; Ben wants to harvest as many trees as possible to maximize short-run profit, and then move on. They face the same
production costs. Refer to the information given. If no explicit property right is given over the forest land, then: A. a property right will be established when trees are cut down and brought to market. B. there is no property right over the harvested timber. C. Alex and Ben will likely work out an agreement on harvesting and replanting the land. D. that implies that government owns and regulates its use.
Demand for the product of an industry in perfect competition is assumed to be inelastic.
Answer the following statement true (T) or false (F)