Other things constant, the price elasticity of demand for a product will be smaller (more inelastic) if:
A. people spend a large share of their income on the product.
B. people spend an insignificant share of their income on the product.
C. the population in the market area is large.
D. there are many good substitutes for the product.
Answer: B
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The shift of the short-run Phillips curve in the figure above is the result of
A) an increase in the natural unemployment rate. B) a decrease in the expected inflation rate. C) a decrease in the actual inflation rate. D) an increase in the expected inflation rate. E) a decrease in the natural unemployment rate.
One problem with the absolute approach to poverty is that there is no agreement as to which goods and services to include in the definition
Indicate whether the statement is true or false
The total revenue curve for a perfectly competitive firm
a. is a vertical line intersecting the horizontal axis b. is a horizontal line intersecting the vertical axis c. starts part way up the vertical axis, then slopes upward in a backwards-S curve d. is a straight line starting from the origin and sloping upward e. starts at the origin, sloping upward at first and then sloping downward
The substitution bias means that
A. Consumer substitute towards good that have become relatively more expensive. B. Consumers substitute towards goods that have become relatively less expense. C. The CPI understates the increase in the cost of living each years. D. The CPI compensates for equal changes and accurately reflect the cost of living. E. None of the above.