According to the textbook, monetary policymaking is most accurately described as:
A. both an art and a science.
B. a science due to detailed models used.
C. an art since human judgments are necessary.
D. superior to other policies, since it is conducted by economists.
Answer: A
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Suppose the price elasticity of teenagers' demand for cigarettes is 2.0. If the government imposes a tax on cigarettes that raises the price by 10 percent, by how much will it reduce teenaged smoking?
A) by 5 percent B) by 10 percent C) by 15 percent D) by 20 percent
An increase in both equilibrium price and quantity is a consequence of a(n): a. increase in supply
b. increase in demand. c. decrease in demand d. decrease in supply
Which of the following is most likely to be true of economic and accounting profits?
a. Economic profits are less than accounting profits. b. Accounting profits are less than economic profits. c. Economic profits plus accounting profits equal zero. d. Accounting profits minus economic profits equal zero.
Use the graph below to answer the next question.
Other things equal, a decrease in the price of a substitute resource would cause a
A. move from a to b on D1. B. move from b to a on D1. C. shift from D3 to D2 assuming the output effect exceeds the substitution effect. D. shift from D2 to D3 assuming the output effect exceeds the substitution effect.