What is the price elasticity of supply? List and briefly define three cases of the price elasticity of supply
What will be an ideal response?
The price elasticity of supply measures how responsive quantity supplied is to a change in the price of the good. Supply can be price elastic, if the percentage change in the quantity supplied exceeds the percentage change in the price, price inelastic, if the percentage change in the quantity supplied is less than the percentage change in the price, or unit elastic, if the percentage change in the quantity supplied equals the percentage change in the price.
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If a country has a balance of payments deficit and wishes to maintain the fixed value of its currency, it will generally
a. sell its own currency for foreign currencies. b. buy its own currency with foreign reserves. c. decrease taxes to increase domestic disposable income. d. increase the money supply to keep interest rates down.
Refer to the above table. What is the marginal revenue product of the fifth worker?
A. $160
B. $400
C. -$800
D. $2