1. If the demand curve is QD = 100 \u00e2 10P and there is a $1 price increase, then the elasticity of demand at P = 2 is<\/p>\n
A. -0.25<\/p>\n
B. -0.5<\/p>\n
C. -0.75<\/p>\n
D. -1<\/p>\n
2. If the absolute value of a demand elasticity is less than 1, then<\/p>\n
A. the demand is inelastic, and a price rise will reduce the total revenue<\/p>\n
B. the demand is inelastic, and a price rise will increase the total revenue<\/p>\n
C. the demand is elastic, and a price rise will reduce the total revenue<\/p>\n
D. the demand is elastic, and a price rise will increase the total revenue<\/p>\n
3. If the cross-price elasticity is negative, then the two goods are<\/p>\n
A. unrelated<\/p>\n
B. substitutes<\/p>\n
C. complements<\/p>\n
D. normal goods<\/p>\n
4. Under perfect competition, a firm maximizes its profit by setting<\/p>\n
A. P = MC because P = MR<\/p>\n
B. P above MC where MC = MR<\/p>\n
C. P = FC<\/p>\n
5. In a large city, a good, real-world example for perfect competition would be<\/p>\n
A. lawyers<\/p>\n
B. gas stations<\/p>\n
C. Time Warner Cable<\/p>\n
D. clothing stores<\/p>\n
6. A firm under monopolistic competition will earn<\/p>\n
A. positive economic profit because it has some monopoly power<\/p>\n
B. zero economic profit because it sets P = MC<\/p>\n
C. zero economic profit because its P = ATC<\/p>\n
D. positive economic profit because it sets MC = MR<\/p>\n","protected":false},"excerpt":{"rendered":"
1. If the demand curve is QD = 100 \u00e2 10P and there is a $1 price increase, then the elasticity of demand at P = 2 is A. -0.25 B. -0.5 C. -0.75 D. -1 2. If the absolute Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-174128","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/174128","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=174128"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/174128\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=174128"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=174128"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=174128"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}