Dana is an art historian who needs to travel to Italy to do research. Art historians usually don't have a lot of money, and therefore are very sensitive to price changes. If the price of the hotel she is staying in decreases from 150 euros per night to 100 euros per night, Dana will increase the length of her stay from 20 days to 40 days. What is Dana's price elasticity of demand for nights spent
in Italy?
a. 0.5
b. 6
c. 2
d. 0.667
e. 1.5
C
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Suppose that along the aggregate demand curve, real GDP equals $14.2 trillion when the GDP deflator is 90. If the GDP deflator were 95, real GDP along the aggregate demand curve would equal
A) more than $14.2 trillion but less than $14.8 trillion. B) less than $14.2 trillion. C) $14.2 trillion. D) more than $14.8 trillion.
A choice made by comparing all relevant alternatives systematically and incrementally is
A) an opportunity cost. B) a choice on the margin. C) a benefit. D) a sunk cost. E) a choice made in the social interest.
In economics, a negotiator who hopes to get an unusually large amount of money for land by refusing to come to terms is called a(n)
A) entrepreneur. B) lobbyist. C) holdout. D) socialist.
If price exceeds marginal cost, we say that a firm receives
a. Extraction surplus b. User costs c. Consumer surplus d. Royalty payments e. Resource rents