Answer the following questions true (T) or false (F)
1. The market demand for The Federalist Papers is likely to be more elastic than the market demand for a best-selling mystery novel.
2. The demand for heating oil in the short run is more elastic than the long run demand for heating oil.
3. The price elasticity of demand for Kellogg's Raisin Bran is larger in absolute value than the price elasticity of demand for all breakfast cereals.
1. FALSE
2. FALSE
3. TRUE
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If an economy is growing at 2 percent a year but its rate of technology growth is 1 percent a year, then this country must be:
a. below its steady state level of capital per worker. b. expected to grow slower in the future. c. has a savings rate that is too low. d. none of the above.
If the price of pizza falls, the demand for pizza will rise
a. True b. False Indicate whether the statement is true or false
If money is neutral and velocity is stable, an increase in the money supply creates a proportional increase in
a. real output only. b. nominal output only. c. the price level only. d. both the price level and nominal output.
When a pharmaceutical firm spends millions of dollars to lobby and convince Congress to extend the number of years a firm is awarded patent protection, then the pharmaceutical firm is engaging in:
A. rent seeking. B. fraud. C. price discrimination. D. marginal cost pricing.