If the income elasticity of demand for lard is -3.00, this means that:
A. lard is a substitute for butter.
B. lard is a normal good.
C. lard is an inferior good.
D. more lard will be purchased when its price falls.
Answer: C
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If demand is inelastic, marginal revenue will be
a. positive. b. zero. c. negative. d. constant.
In the classical long-run model,
a. we focus on labor resources, rather than capital or land b. we study thousands of different resource markets c. we concentrate our attention on three resource markets: land, labor, and capital d. we focus on two markets: households and firms e. the number of variables we include depends upon whether we are focusing on the short run or the long run
The equilibrium price level and the equilibrium level of real GDP are jointly determined by the intersection of the economy’s aggregate supply and aggregate demand schedules.
Answer the following statement true (T) or false (F)
If the equilibrium price of an airline ticket is $400 and the government imposes a price floor of $500 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium
a. True b. False Indicate whether the statement is true or false