A linear demand curve:
A. must be either perfectly inelastic or perfectly elastic.
B. will be more elastic when price is low and more inelastic when price is high.
C. has a constant elasticity.
D. has a constant slope.
Answer: D
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A decision by Congress to reduce spending in order to balance the government's budget is an example of ________ policy.
A. structural B. aggregation C. fiscal D. monetary
Because there are low barriers to entry in a monopolistically competitive market
A) there are many firms in the industry. B) they produce a homogeneous product. C) the firms are price takers. D) there is no non-price competition.
If Terrell can produce more bagels in one day than Zori can produce in one day, then
a. Terrell has a comparative advantage in the production of bagels. b. Zori has a comparative advantage in the production of bagels. c. Terrell has an absolute advantage in the production of bagels. d. Terrell should produce bagels and Zori should spend her time on a different activity.
Using the disposable income level at which the consumption function intersects the 45-degree line, we can identify
A. An inflationary gap to the right of the intersection point. B. Dissaving to the right of the intersection point. C. Dissaving to the left of the intersection point. D. Full employment at the intersection point.