Price elasticity of demand basically measures
A) the reliability of a product.
B) the responsiveness of consumers to price changes.
C) the variability of price changes.
D) the percentage change in market price as a result of a change in demand.
Answer: B
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A country will be able to consume a combination of goods that is not attainable solely from domestic production if
A) the world terms of trade differ from its domestic relative costs. B) the country specializes in one product. C) the country avoids international trade. D) the world terms of trade equal the domestic relative costs. E) the country's domestic production value equals world relative value.
To maximize profit, a perfectly competitive firm will produce where MR = MC, but a monopoly and a monopolistically competitive firm will produce where price = ATC
Indicate whether the statement is true or false