Shifts in the supply of oil have caused large changes in price since the 1970s because
A) both the supply of oil and the demand for oil are inelastic over short periods of time.
B) the supply of oil and the demand for oil are perfectly elastic over short periods of time.
C) the supply of oil is very inelastic while the demand for oil is very elastic over short periods of time.
D) the supply of oil is very elastic while the demand for oil is inelastic over short periods of time.
A
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A rising price level should shift the expenditure schedule
a. upward and decrease equilibrium real GDP. b. downward and increase equilibrium real GDP. c. downward and decrease equilibrium real GDP. d. upward and increase equilibrium real GDP.
A farmer has the ability to grow either corn or cotton or some combination of the two. Given no other information, it follows that the farmer's opportunity cost of a bushel of corn multiplied by his opportunity cost of a bushel of cotton
a. is equal to 0. b. is between 0 and 1. c. is equal to 1. d. is greater than 1.
Table 1.3 shows the hypothetical trade-off between different combinations of brushes and combs that might be produced in a year with the limited capacity for Country X, ceteris paribus.Table 1.3Production Possibilities for Brushes and CombsCombinationNumber of combsOpportunity Cost(Foregone brushes)Number of brushesOpportunity Cost (Foregone combs)J4 0NAK3 10 L2 17 M1 21 N0NA23 On the basis Table 1.3, what is gained from producing at point L rather than point K?
A. 17 combs. B. 10 combs. C. 7 brushes. D. 1 brush.
If a good is a luxury, the income elasticity of demand must be
A. positive and greater than 1. B. zero. C. negative. D. merely positive (not necessarily greater than 1).