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Econ 201 Exam 1 Questions And Verified Detailed Answers
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Econ 201 Exam 1 Questions And Verified Detailed AnswersWhich of the following statements describes the Coase Theorem? - Answer Under some
circumstances private solutions to the problems that result from externalities can be
found.
Which of the following explains why the marginal cost curve has a hooked shape? -
Answer Initially, the marginal product of labor rises, then falls.
Which of the following statements about demand elasticity is true? - Answer If demand,
is inelastic, an increase in price will increase total spending.
Which of the following is TRUE? - Answer A narrowly defined good or service generally
has a more elastic demand.
Demand is elastic if a - Answer Relatively small price increase leads to a relatively large
decrease in the quantity demanded.
The cross price elasticity of demand between your company's product and another
company's product is -2. If the price of the other company's product falls by 4% then the
quantity demanded of your product will_______. Also, the other company's product is a
__________ for your company's product. - Answer Rise by 8%, complement
The taxicab fare in Nelsonville is regulated. The fare presently collected is $6 a ride.
Nelsonville taxicab drivers want to ask government's permission to raise the fare,
believing it would increase their total revenue. From this we can infer that the drivers
believe that taxicab ride demand is - Answer Inelastic
Freezing temperatures in California have sharply reduced the supply of oranges in the
U.S. You predict that the price of oranges will ____; and the less elastic the demand for
oranges, the ____ will be the effect on the price. - Answer Rise; Greater
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