Compare and contrast the relative price elasticities of Marlboro brand cigarettes with cigarettes in general. Why is there a difference?
What will be an ideal response?
How broadly the market is defined determines the price elasticity of a good. In the case of Marlboro brand cigarettes the good is defined narrowly. Since Marlboro has many other close substitutes it has a fairly price elastic demand. However, cigarettes in general tend to be more price inelastic in demand since we are defining the good more broadly.
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting upward C. Short-run aggregate supply shifting downward D. Aggregate demand shifting leftward
When the exchange rate between the U.S. dollar and the euro changes from 1.00 euro per dollar to 1.30 euros per dollar, then the
A) euro has depreciated against the euro. B) U.S. dollar has depreciated against the euro. C) U.S. dollar has depreciated against the dollar. D) euro has appreciated against the dollar. E) U.S. dollar has appreciated against the euro.
The main determinant of how quickly expected inflation adjusts to changes in monetary policy is
A) the slope of the Phillips curve. B) the slope of the short-run aggregate supply curve. C) the credibility of the central bank. D) the degree of indexation in the economy.
A utilities company in the Netherlands buys wind generators made by a U.S. company. It pays from them with previously obtained dollars. By itself, this exchange
a. increases both U.S. net exports and U.S. net capital outflow. b. decreases both U.S. net exports and U.S. net capital outflow. c. increases U.S. net exports and does not affect U.S. net capital outflow. d. None of the above is correct.