In the short run, the ATC curve and the AFC curve for information products are
A. downward sloping.
B. horizontal.
C. vertical.
D. upward sloping.
Answer: A
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When the price of a movie ticket increases from $5 to $7, the quantity of tickets demanded decreases from 600 to 400 a day. What is the price elasticity of demand for movie tickets?
A) 0.83 B) 1.20 C) 1.00 D) 2.32
In the long run, an increase in the saving rate in a steady-state economy will cause
A) an increase in the capital—labor ratio and an increase in consumption per worker. B) an increase in the capital—labor ratio and a decrease in consumption per worker. C) a decrease in the capital—labor ratio and a decrease in consumption per worker. D) a decrease in the capital—labor ratio and an increase in consumption per worker.
The production function shows
A) the total cost of producing a given quantity of output. B) the maximum output that can be produced from a set of inputs. C) the technology used to produce output. D) the incremental output gained by improving the production process.
In the long run the corporate profits tax may lead to
A. lower prices for the products of corporations as well as lower prices for the products of partnerships and proprietorships. B. higher prices for the products of corporations and lower prices for the products of partnerships and proprietorships. C. higher prices for the products of corporations as well as higher prices for the products of partnerships and proprietorships. D. lower prices for the products of corporations and higher prices for the products of partnerships and proprietorships.