An increase in both the equilibrium price and quantity can be the result of
A) a decrease in demand.
B) an increase in supply.
C) a decrease in supply.
D) an increase in demand.
E) None of the above answers is correct.
D
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An increase in taxes of a given amount will have a smaller impact on real GDP than a decrease in government purchases of equal amount because
A. tax increases reduce the incentive to spend and invest. B. some of the additional tax will come from disposable income that would have been saved. C. the decline in disposable income is less than the tax increases. D. government purchases are subject to a larger multiplier than consumption purchases.
Suppose Fergie's Florist experiences ________ up to a certain point and ________ beyond that point. Its long-run average cost curve is most likely to be U-shaped.
A. economies of scale; diseconomies of scale B. constant returns to scale; economies of scale C. diseconomies of scale; constant returns to scale D. diseconomies of scale; economies of scale
Jamaica has a comparative advantage in the production of
A. radios and Norway has a comparative advantage in the production of coolers. B. neither good and Norway has a comparative advantage in the production of both goods. C. both goods and Norway has a comparative advantage in the production of neither good. D. coolers and Norway has a comparative advantage in the production of radios.
Figure 6-2
In Figure 6-2, the price elasticity of demand (dropping all minus signs) is ____ between P = 4 and P = 6 than between P = 10 and P = 12 because between the lower set of prices the percentage change in price is ____.
A. smaller; smaller B. smaller; greater C. greater; smaller D. greater; greater