Refer to the accompanying figure. Suppose the solid line represents the current supply of Star Wars action figures. If the price of the plastic used to make action figures rises, current supply will:
A. shift to S(A).
B. not change because a change in the price of plastic will not affect the demand for action figures.
C. shift to S(B).
D. not change; only the quantity supplied will change.
Answer: A
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The value of the price elasticity of demand for a straight-line demand curve starts with low elasticity values at high prices and has high elasticity values at low prices.
Answer the following statement true (T) or false (F)
Lower rates of inflation increase planned spending because:
A. the Fed reacts to the lower inflation by lowering interest rates. B. resources are redistributed from high-spending households to low-spending households. C. the reduction in wealth, resulting from the reduced real value of money, restrains spending. D. the prices of domestic goods sold abroad increase (with a constant exchange rate).
The additional cost associated with the hiring of one more unit of labor is known as the
A) marginal physical product of labor. B) marginal revenue product of labor. C) marginal factor cost of labor. D) marginal utility of labor.
Refer to the table below. Martha's opportunity cost of making a cake is: Time to Make a PieTime to Make a CakeMartha60 minutes80 minutesJulia50 minutes60 minutes
A. 60 pies. B. 3/4 of a pie. C. 6 pies. D. 4/3 of a pie.