Suppose that the value of the short-run absolute elasticity of demand for a good is 0.4. Then, we know the long-run absolute price elasticity of demand will be
A) 0.
B) greater than 0.4.
C) elastic.
D) less than 0.4.
Answer: B
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A trust game shown in Exhibit 13.13 is a sequential prisoners' dilemma. This means that it is likely that the outcome of the game is not socially efficient. What factors could cause this equilibrium to be different in real life?
What will be an ideal response?
The main effect of an increase in capital stock is a(n):
a. rightward shift of the long-run aggregate supply curve. b. rightward shift of the aggregate demand curve c. leftward shift of the long-run aggregate supply curve. d. leftward shift of the aggregate demand curve. e. increase in price and output levels.
Minimum wage legislation:
a. sets a price ceiling above the market-clearing price. b. has no impact if the minimum wage is above the market-clearing price. c. has the same impact in all labor markets. d. creates unemployment when the minimum wage is above the equilibrium wage. e. is opposed by organized labor.
A bond buyer is a
a. saver. Long term bonds have less risk than short term bonds. b. saver. Long term bonds have more risk than short term bonds. c. borrower. Long term bonds have less risk than short term bonds. d. borrower. Long term bonds have more risk than short term bonds.