Question content area Part 1 The demand curve for a factor of production will be Part 2 A. perfectly elastic if its marginal product declines at constant rate. B. perfectly elastic if the factor is unique or it's difficult to substitute for other factors. C. moremore elastic if its marginal product declines rapidlyrapidly as more of that factor is employed. D. more elastic the more slowly its marginal product declinesslowly its marginal product declines. E. less elastic if other factors can easily be substituted for the factor.
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The demand curve represents how much of a factor (like labor or capital) firms are willing to hire at different prices, which is influenced by the marginal product of that factor. Show more…
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Consider the demand curve above. If area 0ABC is smaller than area 0DEF, we may conclude that demand in this range is: A. inelastic B. elastic C. unit-elastic 11. The elasticity of demand for a product is likely to be greater: A. if the product is a necessity, rather than a luxury good. B. the greater the amount of time over which buyers adjust to a price change. C. the smaller the proportion of one's income spent on the product. D. the smaller the number of substitute products available. The elasticity of supply for a product will be 2.0 if: A. A 1 percent decrease in the price causes a 0.2 percent decrease in quantity supplied B. A 2 percent decrease in price causes a 1 percent decrease in quantity supplied C. A 1 percent decrease in price causes a 2 percent decrease in quantity supplied D. A 2 percent decrease in price causes a 2 percent decrease in quantity supplied
Supreeta N.
QUESTION 13: If the price elasticity of demand is 1.5, regardless of which two points on the demand curve are used to compute the elasticity, then demand is: a. perfectly inelastic, and the demand curve is vertical. b. perfectly elastic, and the demand curve is horizontal. c. elastic, and the demand curve is a straight, downward-sloping line. d. elastic, and the demand curve is something other than a straight, downward-sloping line. QUESTION 14: For a particular good, a 12 percent increase in price causes a 3 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good? a. The good is a necessity. b. The market for the good is narrowly defined. c. The relevant time horizon is long. d. There are many substitutes for this good.
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Consider a competitive firm's demand for a factor of production as a function of the factor price when the prices of other factors are given. Let us consider two cases: 1) the quantity of output is fixed, and 2) the price of the product is fixed. The elasticity of demand is greater in the second case than in the first. Why? True, false, uncertain?
Derrick D.
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