If the percentage change in the quantity demanded of a good is greater than the percentage change in price, price elasticity of demand is:
A. elastic.
B. inelastic.
C. perfectly inelastic.
D. perfectly elastic.
Answer: A
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The social interest theory of regulation suggests that the political process and regulations will ________ and the capture theory of regulation suggests that the political process and regulations will ________
A) seek to minimize deadweight loss; serve the interests of the producers B) try to maximize the producers' economic profits; seek to minimize deadweight loss C) be unaffected by deadweight loss; increase the firms economic profits D) ignore producers' interests and concentrate on consumers' interests; seek to minimize firms' economic profits
Which of the following defines a sunk cost?
a. Cost of the next best alternative b. Cost of producing an additional unit c. An asset with no scrap value d. Total cost of producing a product
Regarding the institutional requirements of efficient markets,
a. Western economic theory ignores the operation of efficient markets b. market economists have an almost perfect understanding c. market economists would never take the necessary institutions for granted d. those involved in a transition from centrally planned economy must develop a deep appreciation e. None of the answers is correct
A German mutual fund sells euros to a U.S. bank for $20,000 . The mutual fund then uses these dollars to purchase a bond issued by United Express, a U.S. delivery company. As a result of these two transactions, what happened to U.S. net capital outflow?
a. It fell by $40,000. b. It fell by $20,000. c. It was unchanged. d. It rose by $20,000.