Which of the following goods is likely to have the highest income elasticity?
A) a designer blouse
B) tomato soup
C) hamburger
D) can of tuna
Answer: A
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Starting from a situation of full employment, an increase in aggregate demand creates ________ and ________ the price level
A) an inflationary gap; raises B) a recessionary gap; lowers C) a recessionary gap; raises D) a recessionary gap; does not change E) an inflationary gap; lowers
In economics, the concept of opportunity cost is:
a. negated by ensuring that the government has a role in a capitalist society. b. defined to be the highest-valued alternative that must be forgone when a choice is made. c. best illustrated by knowing why consumers choose one good over another. d. quantifiable only if you know the real dollar price of the goods and services you are giving up to consume something. e. the methodology that government economists use to determine the total amount of the national debt.
In economics, the function of theories, laws, and hypotheses is to:
A) prevent any misunderstanding of economic behavior. B) divide topics between microeconomics and macroeconomics. C) generate a complete and unchanging description of economic behavior. D) discover relationships between events that are important to economic behavior.
The problem of political instability has been greatest in which continent?
A. South America B. Europe C. Asia D. Africa