Refer to the data. Which of the following is correct?
Answer the question on the basis of the following demand schedule:
A. Although the slope of the demand curve is constant, price elasticity declines as we move
from high to low price ranges.
B. Although the slope of the demand curve is constant, price elasticity increases as we move
from high to low price ranges.
C. Although the demand curve is convex to the origin, price elasticity of demand is constant
throughout.
D. A steep slope means demand is inelastic; a flat slope means demand is elastic.
A. Although the slope of the demand curve is constant, price elasticity declines as we move
from high to low price ranges.
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You may be unwilling to buy a used car because you suspect the last owner found out the car was a lemon. You may treat a car you rented with a little less care than you would use on your own car
a. Both examples primarily illustrate adverse selection. b. Both examples primarily illustrate moral hazard. c. The first example primarily illustrates adverse selection; the second primarily illustrates moral hazard. d. The first example primarily illustrates moral hazard; the second primarily illustrates adverse selection.
When a person engages in detailed analysis of a company to determine its value, he or she is engaging in
a. standard deviation analysis. b. informational analysis. c. fundamental analysis. d. efficiency analysis.