The percentage change in the quantity demanded divided by the percentage change in income refers to the:
a. income elasticity of demand.
b. cross-price elasticity of demand.
c. elasticity of wages.
d. elasticity of labor.
a. income elasticity of demand.
The percentage change in the quantity demanded divided by the percentage change in income is the income elasticity of demand.
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At the midpoint of a linear, downward-sloping demand curve, the price elasticity of demand is
A) greater than one. B) equal to one. C) less than one but greater than zero. D) zero. E) infinite.
You own a business that answers telephone calls for physicians after their offices close. You have an incentive to substitute capital for labor if the
A) marginal product of labor increases. B) price of labor increases. C) price of capital increases. D) price of labor decreases.
In the case of a short-run production function:
A) all of the inputs are variable. B) the amount of labor employed is held constant. C) at least one of the inputs is fixed. D) all of the inputs are fixed.
If a bond dealer sells a government bond to the Fed for $100,000, and the reserve ratio is 10 percent, then the bank that receives a $100,000 deposit from the dealer can expand its loans by ________,
and the money supply can increase by as much as ________. A) $80,000; $800,000 B) $10,000; $100,000 C) $90,000; $1,000,000 D) $90,000; $900,000