If demand price elasticity measures 2, this implies that consumers would
a. buy twice as much of the product if the price drops 10 percent.
b. require a 2 percent drop in price to increase their purchases by 1 percent.
c. buy 2 percent more of the product in response to a 1 percent drop in price.
d. require at least a $2 increase in price before showing any response to the price increase.
e. buy twice as much of the product if the price drops 1 percent.
C
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Economic growth is measured by
A) increases in the population. B) increases in GDP. C) increases in per capita real GDP. D) increases in the value of the total output of society.
Suppose an individual has a fixed amount of wealth to allocate between consumption in two periods (C1 and C2). Any funds not spent in period 1 will earn interest (at the rate r), which will increase purchasing power in period 2 . Consider four possible reactions to an increase in r: I. C1 increases. II. C1 decreases. III. C2 increases. IV. C2 decreases. Which of these is consistent with the
hypothesis that both C1 and C2 are normal goods? a. I, II, III, and IV. b. I, II, and IV, but not III. c. I, III, and IV, but not II. d. II and III, but not I and IV. e. I, II and III, but not IV.
Economists use the government's tax revenue to measure the public benefit from a tax
a. True b. False Indicate whether the statement is true or false
Which of the following does not explain why the command systems of the Soviet Union and Eastern Europe failed?
A. The failure to use money for most exchanges. B. Coordination problems. C. Prices and profits did not fluctuate to reflect wants for a different allocation of resources. D. Incentive problems.