Regarding demand elasticity, which of the following statements is correct?
A. If demand for seller’s product is elastic, a price increase will decrease total revenue.
B. If demand for seller’s product is elastic, a price increase will increase total revenue.
C. If demand is exactly unit elastic, an increase in price will raise total revenue.
D. If demand is exactly unit elastic, an increase in price will raise total revenue.
Answer: A
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The change in the amount of a good purchased after a shift of the supply curve depends on
A. the size of the shift. B. the slope of the demand curve. C. whether the market is subject to price controls. D. All of these responses are correct.
The growth records of Japan and Hong Kong during the last fifty years indicate that an economy can grow rapidly without
a. securely defined property rights. b. abundant domestic natural resources. c. significant capital formation. d. adopting modern technology.
Falling output, in the short run, could be due to:
A. an increase in short-run aggregate supply. B. a reduction in aggregate demand. C. an increase in long-run aggregate supply. D. an increase in aggregate demand.
One In the News article titled "Everything Is on Sale and That's Not Good" suggests that deflation
A. Harms economic growth due to lower profits, more layoffs, and less spending that create a self-reinforcing cycle. B. Harms the economy because bankruptcies decrease. C. Results in higher interest rates that further slow the economy. D. Harms sellers only, but not buyers since they get better deals without worries of job losses.