Suppose an increase in the price of golf clubs from $75 to $125 leads to an increase in quantity supplied from 200 units to 300 units. The price elasticity of supply for golf clubs at the original price of $75 is ________, so supply is ________.
A. 2; inelastic
B. 2; elastic
C. 3/4; inelastic
D. 4/3; elastic
Answer: C
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If the economy experiences an unanticipated demand shock and households and firms have rational expectations, there is
A) no trade-off between unemployment and inflation in either the short run or the long run. B) a trade-off between unemployment and inflation in the long run, but not in the short run. C) a trade-off between unemployment and inflation in the short run, but not in the long run. D) a trade-off between unemployment and inflation in both the short run and the long run.
Imports are goods and services that are produced:
A. and consumed in other countries. B. in other countries and consumed domestically. C. and consumed domestically. D. domestically and consumed in other countries.
Since 1980 the difference between the earnings of college graduates and high school graduates has:
A. fallen, thereby increasing income inequality. B. increased, thereby increasing income inequality. C. remained constant. D. increased, thereby decreasing income inequality.
Reduction or elimination of dividend taxes is designed, in part, to
A) reduce the double taxation burden on individuals. B) make rich people richer. C) reduce inefficiencies in the production process. D) increase corporate tax levels.