If the price elasticity of demand is less than 1, then consumer demand is
A) unrelated to the elasticity of demand.
B) inelastic.
C) elastic.
D) unitary elastic.
Answer: B
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Which of the following will lead to an efficient private solution if negative externalities are present in a market?
A) The party having the legal right is taxed. B) The party creating the externality has the legal property right. C) The party suffering from the externality has the legal property right. D) The parties involved negotiate with each other and reach an agreement.
Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?
a. the effect of taxes on the prices of airline tickets, and the profitability of automobile-manufacturing firms b. the price of beef, and wage differences between genders c. how consumers maximize utility, and how prices are established in markets for agricultural products d. the percentage of the labor force that is out of work, and differences in average income from country to country