Let Edt = -0.5. This implies that the demand for t is
A. inelastic, because if Pt decreases by $1, Qdt will increase by 0.5 units.
B. inelastic, because if Pt decreases by 1 percent, Qdt will increase by 0.5 percent.
C. elastic, because if Pt decreases by 1 percent, Qdt will decrease by 0.5 percent.
D. elastic, because if Pt increases by 1 percent, Qdt will decrease by 0.5 percent.
Answer: B
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Labor productivity in the United States was 5.4 times higher in the United States than in China in 2010. A key reason that labor productivity is higher in the United States is because the United States
A) has a higher growth rate, based on GDP per capita, than China. B) has a higher life expectancy and higher birth rate than China. C) devotes more resources than China to developing new technology and accumulating human capital. D) devotes more resources than China to developing export markets to boost its real GDP and income.
Total state and local government spending in 2007 was
a. less than $100 billion b. approximately $500 billion c. nearly $1.9 trillion d. approximately $10 trillion e. more than $25 trillion
When private ownership of a resource is clearly defined and enforced, the private owner
a. has little incentive to consider the wishes of others when deciding how to employ the resource. b. has little incentive to use the resource wisely. c. has a strong incentive to consume the resource during the period rather than conserving it for the future. d. has a strong incentive to use the resource wisely.
Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. The opportunity cost of one tomato in Country B is:
A. 6 bananas. B. 108 bananas. C. 3 bananas. D. 18 bananas.