With no change in fiscal policy, the budget
a. will run a surplus during a recession and a deficit during a boom.
b. deficit will rise during a recession and fall during a boom.
c. deficit will fall during a recession and rise during a boom.
d. will remain unchanged by adverse economic conditions.
b
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If a 10 percent price increase generates a 20 percent decrease in quantity demanded, then demand is
A) elastic. B) perfectly inelastic. C) perfectly elastic. D) inelastic. E) unit elastic.
The fundamental reason a single-price monopoly creates a deadweight loss is that compared to the efficient outcome, the single-price monopoly
A) raises variable cost. B) raises fixed cost. C) restricts output. D) reduces the elasticity of demand.
Since price tends to equal total utility, the price of water is low and the price of diamonds is high
a. True b. False Indicate whether the statement is true or false
The focal point phenomenon:
A. argues that trade barriers force countries to locate production in other countries. B. explains why production tends to take place in a few select countries rather than being evenly distributed across countries. C. explains why production tends to take place in countries that have fewer trade barriers. D. argues that transportation costs make it unprofitable to locate production in other countries.