The price elasticity of demand for a monopolist's product depends on
A. the number and similarity of substitutes.
B. the MC of the item it produces.
C. the AVC of the item it produces.
D. the ATC of the item it produces.
Answer: A
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Consider an economy that only produces steel and shoes; steel is capital intensive and shoes are labor intensive. How will emigration of labor from this economy affect the marginal productivity of labor?
a. It will fall. b. It will not change. c. It will rise. d. It will fall in the short run and rise in the long run.
The problems of thin markets can be addressed by:
A. guaranteed price matching. B. increasing the number of sellers in the market. C. imposing price ceilings. D. warranties and repair guarantees.
Which of the following is TRUE regarding the distribution of wealth and the distribution of income?
A) The distribution of wealth is a less accurate measure of inequality because it excludes human capital. B) The distribution of wealth is a more accurate measure of inequality because it includes houses. C) The distribution of income is a less accurate measure of inequality because it excludes the value of things you own. D) The distribution of income is a less accurate measure of inequality because not everyone has a job.
A useful economic model
A) utilizes only the two most important factors to analyze the problem under consideration. B) generates statements that are incapable of refutation. C) represents every detail of the real world. D) yields usable predictions and implications for the real world.