Big Alice Ice Cream Parlor reduced its price of an ice cream cone from $1 to 90 cents. Sales consequently increased from 1,000 cones per week to 1,050 . The approximate price elasticity is
a. 0.20.
b. 0.46.
c. 2.16.
d. 5.00.
b
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If a government has a budget deficit, it must
A) decrease its expenditures. B) borrow in the loanable funds market. C) decrease taxes. D) increase taxes. E) lower the real interest rate.
Assume that both the goods and the labor market are perfectly competitive. If at equilibrium, the wage rate is $20 per hour and the marginal product of labor is 4 units, the firm's marginal cost must be equal to:
A) $5. B) $24. C) $40. D) $80.
Refer to the figure above. What is the quantity supplied in the market when the market is perfectly competitive?
A) 30 units B) 45 units C) 60 units D) 90 units
Most of the money that we pay to foreigners to finance our current accounts deficit
A. flows back to the U.S. in investment funds. B. stays abroad where it circulates as currency. C. ends up in the hands of drug dealers. D. is used by foreign governments as reserves.