If you spend a large portion of your income on a good,
A) supply of that good would be price elastic.
B) demand for that good is more elastic than if you spent a smaller portion of your income on the good.
C) supply of that good is price inelastic.
D) demand for that good is less elastic than if you spent a smaller portion of your income on the good.
E) the good must be able to be produced at a constant (or gently rising) opportunity cost.
B
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Diminishing marginal returns to labor occur because
A) after a while it is hard to find a good worker. B) the capital resources used by the firm are fixed in the short run. C) workers become more efficient over time. D) larger companies are less efficient.
If the inverse demand curve a monopoly faces is p = 100 - 2Q, MC is constant at 16, and the government imposes an $8 per unit specific tax on the monopoly, the deadweight loss due to both the monopoly and the tax is
A) $529. B) $1332. C) $1764. D) $441.