If the price of a cup of coffee increases by 50 percent, the quantity demanded decreases by 50 percent. The price elasticity of demand is:
A. elastic.
B. inelastic.
C. unit elastic.
D. zero.
C. unit elastic.
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
An ideal cost-of-living index measures:
A) The relative cost of maintaining a particular utility level. B) The relative changes in consumer satisfaction that arise from price increases. C) The relative price of those goods that are considered to be necessities in consumption. D) none of the above
Oligopoly is a situation when there
A) is one firm in the industry that is fairly large. B) are a few large firms in the industry. C) are too many firms in the industry and there is excess capacity. D) is one giant firm and many smaller firms forming a competitive fringe.
According to the "law" of demand, we would expect
a. the demand curve to be negatively sloped. b. the demand curve to be positively sloped. c. the total quantity demanded by the market to move in the same direction as price. d. marginal utility to increase as quantity demanded increases.