Suppose the current level of output is 5000 and the elasticity of output with respect to labor is 0.7. A 10% increase in labor would increase the current level of output to
A. 5035.
B. 5350.
C. 5070.
D. 5700.
Answer: B
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If Best Lights, Lights R Us, and Bright Lights are all competing in the light bulb market and Best Lights consistently is the first to change prices, Best Lights might be ________.
A) offering to be the price leader B) signaling to the other firms to consistently lower their prices C) signaling to the other firms to consistently raise their prices D) signaling to the other firms to consistently maintain their prices
Elasticity
a. deals with percentage changes in price and quantity demanded. b. employs percentage changes calculated in terms of average values of the prices and quantities at issue. c. is generally stated in absolute value. d. All of the above are correct.
Each president of a Reserve Bank serves for a:
A. two-year renewable term. B. fourteen-year term. C. seven-year term. D. five-year term.
The government of a DVC may purposely cause inflation because:
A. a rapid rate of inflation attracts private foreign capital into a DVC. B. there is conclusive evidence that inflation discourages people from having large families. C. this will strengthen the nation's position in international markets. D. inflation works like taxation in that it may release resources from consumption so that they can be invested.