The price elasticity of demand for new cars is 1.2. Hence, a 10 percent price increase will
A) decrease the quantity of new cars demanded by 1.2 percent.
B) increase consumer expenditure on new cars by 1.2 percent.
C) decrease the quantity of new cars demanded by 12 percent.
D) increase consumer expenditure on new cars by 12 percent.
C
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The efficient quantity of a public good is provided when the economy's
A) total benefit from the good equals its total cost. B) total benefit from the good is less than its total cost. C) marginal social benefit from the good equals its marginal social cost. D) marginal social benefit from the good is greater than its marginal social cost.
All else equal, the ________ the pool of buyers who can be fooled once by false advertising, the ________ profitable it is to falsely advertise.
A) larger; less B) smaller; more C) larger; more D) greater; least
If the reserve ratio is 5 percent, then $600 of additional reserves can create up to
a. $30 of new money. b. $3,000 of new money. c. $12,000 of new money. d. None of the above is correct.
Upon graduation, Ellie had two job offers. The jobs were identical in every way with two exceptions. One job was located in San Diego, CA and offered an annual salary of $50,000. The other job was located in Omaha, NE and offered an annual salary of $60,000. The salary difference is due to
A. compensating differentials. B. the firm in California had a higher demand for workers than the firm in Nebraska. C. transfer payments. D. discrimination.