When quantity supplied is very responsive to a change in price, supply is
A) elastic.
B) unit-elastic.
C) inelastic.
D) income sensitive.
A
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Use the figure below, and the regular percentage change formula, to answer the following question: 
Assume that price decreases from $10 to $2. The price elasticity of supply is about
A. 0.35 and supply is inelastic. B. 1 and supply is unit-elastic C. 4 and supply is elastic. D. 1.25 and supply is elastic.
Purchasing power parity exists when domestic currency:
a. maintains a fixed exchange rate with foreign currency. b. is not convertible into foreign currency. c. buys more goods at home than abroad. d. buys as many goods at home as it does abroad. e. appreciates in value against foreign currency.
Time inconsistency will cause the
a. short-run Phillips curve to be higher than otherwise. b. short-run Phillips curve to be lower the otherwise. c. long-run Phillips curve to be farther to the right than otherwise. d. long-run Phillips curve to be farther left than otherwise.
Industry profits are maximized in the figure below (QM1 = QM2):
A. at the point where r1 = r2. B. only at point QM1. C. only at point QM2. D. on the line segment joining points QM1 and QM2.