If labor is 20 percent of total costs in industry A and 70 percent in industry B, then other things equal, we would expect the elasticity of demand for labor to be
A) greater in industry A than in industry B.
B) greater in industry B than in industry A.
C) the same in both industries.
D) uncertain since no general relationship exists between cost shares and elasticities.
Answer: B
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Refer to Figure 15-17. You are a member of a student government and are asked to recommend a price for the course and you argue: "I think the college should charge a price so that it just breaks even on the course" How much profit (or loss) will the college make on the course if it charges this price?
A) -$2,592,000 B) -$1,080,000 C) $0 D) $450,000
What most accurately describes the implementation of the New Deal?
a. It was implemented in two phases over the course of about eight years. b. Its major reforms were implemented in the first 100 days of Franklin Roosevelt's Presidency. c. The first elements of the New Deal that were implemented were the most politically liberal. d. Most of the reforms were temporary and were phased out by World War II.
An increase in the price of good X will be accompanied by
a. a shift in the market demand curve for good X. b. a shift in the market demand curve for good Y (a substitute for good X). c. a movement along the market demand curve for good X. d. Both b and c.