Stating that income elasticity of demand for potatoes equals 0.15 is equivalent to stating that if income
A) decreases by 10 percent, potato purchases decrease by 1.5 percent.
B) increases by 10 percent, potato purchases increase by 15 percent.
C) decreases by 1.5 percent, potato purchases decrease by 10 percent.
D) increases by 15 percent, potato purchases decrease by 10 percent.
E) none of the above
A
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Unemployment normally arises when:
A) labor markets are frictionless. B) wages are above the market clearing wage level. C) wages are below the market clearing wage level. D) wages are equal to market clearing wage level.
The absence of barriers to entry in monopolistic competition means that in the long run, firms
A) earn an economic profit. B) earn zero economic profit. C) incur an economic loss. D) earn either an economic profit or zero economic profit. E) earn either zero economic profit or suffer an economic profit.
In the Solow model, if f(k) = 8k0.5, s = 0.2, n = 0.3, and d = 0.1, what is the value of k at equilibrium?
A) 1 B) 4 C) 9 D) 16
The distinguishing feature of a well-functioning financial market is the
A) continual increase in the liquidity of most assets. B) continual reduction in the riskiness of most assets. C) increased ease of converting common stocks into bonds. D) incorporation of available information into asset prices.