A good with a vertical demand curve has a price elasticity of demand that ________
A) is equal to 1
B) is equal to infinite
C) is equal to zero
D) varies between 0 and 1
C
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The law of one price (LOOP) indicates that:
a. The nominal wage rate in one country should be equal to the exchange-rate-adjusted wage of the average laborer in another country. b. The price of a good in one country should be equal to the exchange-rate-adjusted price of the same product in another country. c. The quantity produced of a good in one country should be equal to the exchange-rate-adjusted quantity produced of the same product in another country. d. None of the above. e. Nominal interest rates in countries should be identical because if they were not, arbitragers could make risk-free profits.
When a paper producer pollutes the air, economists argue that there is
A) efficiency, if production is at its maximum level. B) a positive externality. C) an external cost. D) a cost paid solely by the firm.