Refer to the diagram and assume that price increases from $2 to $10. The coefficient of the price elasticity of supply (midpoint formula) relating to this price change is about:
A. 5 and supply is elastic.
B. 1 and supply is unit elastic.
C. .25 and supply is inelastic.
D. 2.5 and supply is elastic.
C. .25 and supply is inelastic.
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A consumer's budget constraint is:
A. a positively-sloped line. B. a negatively-sloped line. C. convex. D. a vertical line at the level of the consumer's income.
The coordinates of point A are 20 units of X and 36 units of Y. The coordinates of point B are 22 units of X and 30 units of Y. With X on the horizontal axis and Y on the vertical axis, the slope of the line between points A and B is
A) + 3.00 B) + .20 C) + 0.33 D) - 0.33 E) - 3.00
Refer to the graph shown. If this firm is maximizing profit, it will:
A. earn just normal profits, that is, zero economic profits. B. earn economic profits. C. make enough to cover its variable costs but not its fixed costs. D. incur a loss.
If Sara Thomas' disposable income increases from $4,000 to $4,500 and her level of saving increases from $200 to $300, it may be concluded that her marginal propensity to:
a. Consume is .75 b. Save is .30 c. Consume is .60 d. Consume is .80