Elastic demand implies
A) that a one percent increase in price results in a smaller than one percent decrease in quantity demanded.
B) that a one percent increase in price results in a larger than one percent decrease in quantity demanded.
C) that a one percent cut in price results in a larger than one percent increase in quantity demanded.
D) that a one percent decrease or increase in price induces no change in total revenue.
B
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The appropriate discount rate should not be adjusted for _____
a. inflation b. risk of default c. taxes on interest d. a and c
Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The slope of Country A's production possibilities frontier is _______, and Country B's is __________.
A. 5; 3
B. 30; 3
C. 1/5; 1/3
D. 1/5; 1/3
The real value of an economic variable is
A. the producer price. B. computed by taking the nominal value and dividing by the appropriate price index. C. the consumer price index. D. expressed in terms of actual market prices at which goods are sold.
Assume that many households and businesses reduce their spending only because they expect other households and consumers to reduce their spending. Also suppose that all households and consumers would be better off if they did not reduce their spending
This situation best describes the: A. real-business-cycle theory. B. rational expectations theory. C. concept of coordination failures. D. adaptive expectations theory.