Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4Refer to Figure 2.4. The economy moves from Point E to Point B. This could be explained by
A. a change in society's preferences for hybrid cars versus motorcycles.
B. an increase in economic growth.
C. an increase in unemployment.
D. a reduction in unemployment.
Answer: A
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If the price elasticity of demand for cigarettes is 0.55, and the price of cigarettes increases by 10 percent, then the quantity of cigarettes demanded will fall by:
A. 55 percent. B. 5.5 percent. C. 0.55 percent. D. 550 percent.
If asset prices rise:
A. productive capacity increases. B. real wealth increases. C. it is unclear whether wealth increases or inflation has occurred. D. inflation increases.
Which of the following statements about price elasticity of demand is false?
A) The value of the price elasticity of demand is the reciprocal of the value of the demand curve's slope. B) If quantity demanded changes by a larger percentage than the percentage change in price, demand is elastic. C) The value of the price elasticity of demand along a downward-sloping demand curve is always negative. D) A linear downward-sloping demand curve has a varying price elasticity coefficient.
According to this Application, increases in unemployment insurance will ________ the total amount of employment
A) either increase or decrease B) have no effect on C) increase D) decrease