Total revenue received by surfboard manufacturers increases by $2 million when the price of a surfboard decreases by $10. The price the elasticity of demand for surfboards is
A) between 0 and 1.
B) greater than 1.
C) equal to 0.
D) some amount that is impossible to determine without more information.
B
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Why do price ceilings tend to cause persistent imbalances in the market?
a. Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. b. Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. c. Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. d. Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.
Costs that a firm remaining in business will still incur even if it halts current production are called
a. fixed costs. b. variable costs. c. implicit costs. d. explicit costs.
Referring to Table 4.2, Box Q should be filled with 
A. $12.50. B. $7.50. C. $2. D. $00.