Refer to the below graph. Consider a situation where price increases from P3 to P4. In this price range, demand is relatively:
A. Inelastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A)
B. Elastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A)
C. Elastic because the loss in total revenue (area A) is greater than the gain in total revenue (areas E + F + G)
D. Inelastic because the loss in total revenue (area A) is greater than the gain in total revenue (areas E + F + G)
B. Elastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A)
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Suppose tennis shoes cost $50 per pair and firms supply 50,000 pairs of shoes. If the price decreases to $45 and firms decide to supply 48,000, the elasticity of supply equals
A) 0.0025. B) 0.04. C) 2.63. D) 0.39.
In the early 1900s, Henry Ford revolutionized the automotive manufacturing industry by instituting the assembly line. What impact did the assembly line method for producing automobiles have on the per-worker production function for Ford?
A) It became linear. B) It shifted down. C) It shifted up. D) It became flatter.