The hypothesis that changes in the money supply lead to an equiproportional change in the price level is called
A. the classical theory of money.
B. the quantity theory of money.
C. the Keynesian theory of money.
D. the fractional theory of money.
Answer: B
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Suppose an increase in the price of golf clubs from $75 to $125 leads to an increase in quantity supplied from 200 units to 300 units. The price elasticity of supply for golf clubs at the original price of $75 is ________, so supply is ________.
A. 2; inelastic B. 2; elastic C. 3/4; inelastic D. 4/3; elastic
The demand for a necessity whose cost is a small portion of one's total income is
A. perfectly inelastic. B. relatively inelastic. C. relatively elastic. D. unit-elastic.
Refer to the figure above. The optimal quantity produced by the monopolistic competitor is ________
A) Q1 B) Q2 C) Q3 D) Q4
If nations begin to specialize in production for the purpose of trade,
A. the utility from consumption will increase, but not the total output. B. total world output will increase, as well as well-being from consumption. C. total world output will increase, but well-being from consumption will not. D. neither total output nor well-being from consumption will change. E. the impact on total output and well-being cannot be predicted.