A good is said to have a relatively elastic demand if the value of price elasticity is:
A) equal to 0.
B) between 0 and 0.5.
C) between 0.5 and 1.
D) greater than 1.
D
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Banks are prohibited from holding __________ in their portfolio of assets
A) commercial paper B) local government securities C) farm mortgages D) corporate stock
Assume that the supply curve is horizontal because marginal cost is constant at $10. John, Robert, and Jimmy each value one compact disc at $20 but only Jimmy and John value a second compact disc (Jimmy at $5 and John at $15). If a social planner dictates that two compact discs be produced and distributed to John, Robert, and Jimmy, then even if the compact discs are allocated based on demand, this market will lose out on $___ of value.
a. $5. b. $10. c. $15. d. There will be no lost value as five compact discs is the efficient level.