Which of the following factors will make the demand for a product relatively elastic?
A. The good is considered a necessity.
B. There are few substitutes.
C. The time interval considered is long.
D. Purchases of the good require a small portion of consumers' budgets.
Answer: C
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Economies of scale
a. require inputs' MPP to fall as output increases (everything else equal). b. pertain to the long run only. c. refer to increased output generalized by an increase in the quantity of a single input. d. imply that the AC curve will fall continuously as output increases in the short run.
Under the current structure of Medicare, the movement of the baby boom generation into the retirement phase of life will
a. increase the demand for medical services and the share of those services financed by third parties. b. push both healthcare prices and expenditures upward. c. cause Medicare expenditures to increase and necessitate the need for higher taxes to finance the program. d. do all of the above.