Figure 7-4
Which of the following is true for the demand curve depicted in ?
a.
An increase in price from $2 to $3 will reduce total expenditures on the product.
b.
In the $2 to $3 range, the price elasticity of the demand curve is approximately unitary.
c.
At a price of $2, the price elasticity of the demand curve equals approximately -2.5.
d.
In the $2 to $3 range, the demand curve is inelastic.
d
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Money is still useful during times of inflation because
A) it still retains the characteristic of predictability of value. B) its opportunity cost falls as inflation rises. C) more money can be made so people can still purchase the goods and services they want. D) it is not a liquid asset.
Which of the following statements regarding patents is false?
A) Patents can help firms gain market power through innovation and then act as a barrier to entry. B) A firm that has market power as a result of a patent may be more likely to innovate than a perfectly competitive firm. C) Patents encourage the production of information, which might otherwise be under supplied. D) Patents can last for an indefinite time period.