There are two methods of calculating elasticities. One calculates the ratio of the percentage changes in quantity and price, and the other calculates the average percentage changes in quantity and price. We use the second method because it
a. involves an additional calculation
b. is not sensitive to direction of movement
c. is sensitive to direction of movement
d. is never wrong
e. always has the same sign
B
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The recession of 2007-2009 made many consumers pessimistic about their future incomes. How does this increased pessimism affect the aggregate demand curve?
A) This will shift the aggregate demand curve to the left. B) This will move the economy up along a stationary aggregate demand curve. C) This will shift the aggregate demand curve to the right. D) This will move the economy down along a stationary aggregate demand curve.
A Lorenz curve measures the ________ on the vertical axis
A) cumulative percentage of money income B) cumulative percentage of family wealth C) cumulative percentage of families D) demand of families on welfare
Natural monopolies:
A. are the only monopolies that are efficient. B. can capture the lowest production costs possible for the industry. C. are always protected by government policy. D. generally earn zero accounting profits due to regulations.
A baby boom will have what immediate effect on the disposable diaper market?
a. Supply decreases. b. Supply increases. c. Demand decreases. d. Demand increases. e. Supply and demand remains the same.