Suppose the US demand curve for gasoline shifts rightward, and the U.S. supply curve for gasoline remains unchanged. As a result, the price of gasoline increases by 9 percent, and the equilibrium quantity increases by 3 percent
Which of the following statements is true based on this information? A) The price elasticity of supply for gasoline is roughly 0.33.
B) The price elasticity of supply for gasoline is roughly 3.
C) The price elasticity of demand for gasoline is roughly 0.33.
D) The price elasticity of demand for gasoline is roughly -3.
A
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If the isoquants are straight lines, then
A) inputs have fixed costs at all use rates. B) the marginal rate of technical substitution of inputs is constant. C) only one combination of inputs is possible. D) there are constant returns to scale.
Hotelling's model has been used to describe differentiation in the political "market." Suppose that 100 voters are evenly distributed between the extreme left and the extreme right on the political spectrum, and that all voters vote, and they always vote for the candidate closest to them on this spectrum. The numbers on this spectrum represent the number of voters lying to the left of the number. So, at the midpoint, fifty voters lie to the left and fifty to the right. At the extreme right end, all 100 voters lie to the left. 
width="553" />If Candidate Y is running against Candidate Z: A. Neither candidate has any incentive to move. B. Both candidates will have an incentive to move to the left. C. Candidate Y will have an incentive to move to the left, and Candidate Z will have an incentive to move to the right. D. Both candidates will have an incentive to move toward each other's position.