When calculating the arc elasticity of demand, the percentage change in price (quantity) should be based on the average of the starting and ending prices (quantities). Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Which of the following statements is correct? A) A change in demand or supply can only be caused by a change in price. B) A simultaneous decrease in demand and increase in supply will result in an increase in equilibrium price and uncertain effect on quantity. C) If price is currently above equilibrium, market adjustments […]
Date: September 10th, 2020
A predatory pricing strategy will have the greatest chance of success when the predatory price is set below the cost of the firm’s competitors, new rivals are unlikely to enter after the strategy ends, and profits can be recouped in a relatively short period of time. Indicate whether the statement is true or false […]
Date: September 10th, 2020
Assume the supply function for good X can be written as Qs = -100 + 27Px – 5Py – 1.8W, where Px = the price of X, Py = the price of good Y, and W = Wage index for workers in industry X. According to this equation: A) X and Y are substitutes in […]
Date: September 10th, 2020
The U.S. dollar appreciates against the euro. What is the impact on aggregate expenditures and income? A) Both increase. B) Both decrease. C) Aggregate expenditure increases and income decreases. D) Aggregate expenditure decreases and income increases. ANSWER B
Date: September 10th, 2020
X-inefficiency refers to the situation in which firms with market power are operating in the upward-sloping segment of their long-run average cost curve. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Referring to the previous question, all else constant, a 5 unit increase in the wage index would cause: A) quantity supplied to increase by 9 units and be shown by a movement up the supply curve. B) quantity supplied to decrease by 9 units and be shown by a movement down the supply curve. C) […]
Date: September 10th, 2020
Assume the demand function for a particular good can be written as P = 150 – 6Q. When P = 12, the point elasticity of demand equals 2.08. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
The marginal propensity to consume is 0.75, marginal propensity to invest is 0.3, and the marginal propensity to import is 0.2. What is the size of the multiplier? A) 6.67 B) 5.67 C) 4.67 D) 1.67 ANSWER A
Date: September 10th, 2020
Evidence suggests that as the amount of market power possessed by the firms in an industry increases, the amount of X-inefficiency will decrease. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
