The demand for most agricultural products tends to be
a. both price and income elastic
b. both price and income inelastic
c. price inelastic and income elastic
d. price elastic and income inelastic
e. unit elastic in terms of price elasticity and income elastic
B
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An important hindrance to developing countries in carrying out monetary policy is that they
a. usually lack central banks b. are usually unable to issue their own currency c. are unable to borrow money d. usually lack effective bond markets e. all of the above
In a perfectly competitive industry the market price is $25. A firm is currently producing 10,000 units of output; average total cost is $28, marginal cost is $20, and average variable cost is $20. The firm should
A. produce less because the next unit of output decreased profit by $3. B. raise price because the firm is losing money. C. keep output the same because the firm is producing at minimum average variable cost. D. shut down because the firm is losing money. E. produce more because the next unit of output increases profit by $5.
In a graph with disposable income on the horizontal axis and consumption on the vertical axis, the intersection of the 45-degree line with the
A. Full-employment output indicates equilibrium (macro). B. Aggregate spending curve indicates full employment. C. Aggregate demand curve indicates equilibrium. D. Consumption function indicates zero saving.
When two variables have a direct relationship, the slope is
A) negative. B) positive. C) zero. D) infinity.