The own-price elasticity of demand is defined as:
a. the ratio of a change in quantity demanded and the change in price.
b. the ratio of the percentage change in quantity demanded to the percentage change in price.
c. the ratio of the percentage change in quantity demanded to the percentage change in input prices.
d. the ratio of a change in output and the change in input usage.
QUESTION 2Which of the following lists give world exports in the order of their value, from highest to lowest?
a. Aircraft, motor vehicle parts, crude petroleum
b. Aircraft, crude petroleum, motor vehicle parts
c. Crude petroleum, office and telecom equipments, automotive parts
d. Motor vehicle parts, aircraft, crude petroleum
e. Motor vehicle parts, crude petroleum, aircraft
QUESTION 3A downward-sloping demand curve is faced by firms:
a. under perfect competition.
b. under perfect competition and monopoly.
c. in all market structures except monopoly.
d. in all market structures except monopolistic competition.
e. in all market structures except perfect competition.
QUESTION 4A perfectly competitive firm cannot make economic profits in the long run because:
a. it is a price taker.
b. there are no barriers to entry into the industry.
c. it faces a perfectly elastic demand curve.
d. its advertising costs will rise to eliminate any economic profits.
QUESTION 5Bankers supported the Federal Reserve Board's Regulation Q because:
a. it allowed them to charge lower interest rates on loans.
b. it protected them from money market volatilities.
c. it increased the demand for loanable funds in the market.
d. it allowed them to borrow at a low rate of interest and lend out at a high rate of interest.
QUESTION 6Which of the following factors is least likely to affect what goods and services countries end up trading in the international market?
a. International trade tariffs
b. Government debt levels
c. Comparative advantages
d. Differences in tastes
e. Different technological needs
QUESTION 7A monopolistically competitive firm faces a relatively-elastic demand curve as compared to a monopolist firm because of the:
a. presence of a large number of buyers and barriers to entry.
b. presence of a large number of firms and easy entry into the market.
c. production of perfectly homogeneous products.
d. production of unique products and the presence of barriers to entry.
e. production of goods that are perfect complements of each other.
QUESTION 8If a perfectly competitive industry is neither expanding nor contracting, we would typically expect that:
a. accounting profits to be zero.
b. economic profits to be zero.
c. the price of the good will be stable
d. both (b) and (c) would be true.
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