If a price decrease of a product significantly raises its revenues, then the absolute price elasticity of demand for that product must be
A. an example of unit elasticity.
B. greater than one.
C. less than one.
D. equal to one.
Answer: B
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If aggregate planned expenditures are less than real GDP, then
A) inventories increase above their planned levels and businesses increase their production. B) unplanned inventory changes equal zero. C) inventories decrease below their planned levels and businesses increase their production. D) inventories increase above their planned levels and businesses decrease their production. E) there is no equilibrium level of real GDP.
An increase in a perfectly competitive firm's demand for labor could be caused by
A) an increase in the supply of labor. B) a decrease in the market price of the product the firm produces. C) an increase in the amount of human capital among the labor force. D) a decrease in the market wage rate.
A market basket:
A. only includes housing, food, and clothing, but not things like transportation. B. looks like a really long shopping list for what firm's typically purchase. C. includes specific goods and services in fixed quantities that roughly correspond to a typical consumer's spending. D. is what an economist creates in order to understand purchasing trends of households and firms.
According to the graph shown, the market price is:
A. $15
B. $9
C. $11
D. $20