What is true of the price elasticity of demand faced by a monopoly firm?
A) Demand is inelastic.
B) Demand is more elastic at lower prices and more inelastic at higher prices.
C) Demand is perfectly elastic because the monopolist has no competition.
D) Demand becomes more elastic as the range of imperfect substitutes expands.
D
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In the example of Ireland described in the text, the country's production set shifted outward over time because:
a. of technological advancements which improved its potato cultivation and overall agricultural production. b. it gained new resources over time which enabled it to specialize and gain comparative advantage in software trade with the U.S. and Europe. c. of new resources which allowed it to gain absolute advantage over many of its trading partners. d. of reduction in trade barriers with the European Union.
The Laffer curve shows that as tax rates rise from 0 percent to 100 percent, tax revenues will
a. rise b. first rise, then fall, then rise again c. fall d. first rise, then fall e. remain constant