Compared to the short-run price elasticity of demand, the long-run price elasticity of demand is
A) smaller.
B) the same.
C) greater.
D) either greater than or less, depending on the number of substitutes the good has.
Answer: C
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In an open economy, the government purchases multiplier will be smaller the
A) larger the marginal propensity to consume. B) smaller the marginal propensity to import. C) larger the tax rate. D) All of the above are correct.
Suppose you observe that the price of movie admissions decline and that the number of people attending movies declines as well. If only the demand curve or the supply curve shifts, this suggests that
A) movies are a normal good and incomes have increased. B) high salaries for Hollywood actors have increased the cost of movie making. C) movie theaters have experienced an increase in their operating costs due to increases in the minimum wage. D) admission prices for other types of entertainment, such as live shows and sporting events, have also declined.
Assume that the opportunity cost for Germany to produce a jet is 50 cars. If Germany is producing on its production Possibility Frontier, some possible combinations of output for Germany could be:
A. (1,000 jets, 5,000 cars) and (900 jets, 10,000 cars). B. (1,000 jets, 5,000 cars) and (900 jets, 15,000 cars). C. (2,500 jets, 2,000 cars) and (2,300 jets, 20,000 cars). D. (2,500 jets, 2,000 cars) and (2,300 jets, 3,000 cars).
Which of the following does not shift the entire consumption function?
a. Net Wealth b. Price Level c. Interest Rates d. Producer Expectations