The ABC Computer Company wants to increase the quantity of computers it sells by 5%. If the price elasticity of demand is -2.5, the company must
A. increase price by 0.5%.
B. decrease price by 0.5%.
C. decrease price by 2.0%.
D. increase price by 2.0%.
Answer: C
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
The broadest measure of the price level that includes all final goods and services is
A) the consumer price index. B) the producer price index. C) the wholesale price index. D) the GDP deflator.
Figure 11-4
Physicians have two types of patients: private patients who pay directly or with insurance, and Medicaid patients whose care is paid for by the state. Physicians must lower prices to attract more private patients, but they can add unlimited Medicaid patients at a constant price. The situation facing Dr. Casey is depicted in Figure 11-4. Units of medical service (say, number of patients × number of visits) are measured on the horizontal axis. How many units of medical service will Dr. Casey deliver?
a.
OA
b.
OB
c.
OC
d.
OD
The opportunity cost of watching television is:
A. all of the alternative programs that appear on other stations. B. zero because there is no money expenditure involved. C. the alternative use of the time foregone by watching the program. D. zero if it benefits you.