If a firm offers a senior citizen discount,
A) the firm expects the average senior citizen to have a lower price elasticity of demand.
B) the firm expects the average senior citizen to have a higher price elasticity of demand.
C) senior citizens may be offended.
D) it may be prosecuted for discrimination.
B
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Refer to Figure 7-2. The tariff causes domestic consumption of coffee
A) to rise by 20 million pounds. B) to fall by 27 million pounds. C) to rise by 6 million pounds. D) to fall by 7 million pounds.
If the marginal propensity to save (MPS) is 0.50, the value of the spending multiplier is:
a. 1. b. 2. c. 4. d. 9.
Based on the evidence, most economists believe that the self-correcting mechanism operates
A. slowly with prices, but quickly with wages. B. slowly with wages, but quickly with prices. C. very slowly with wages. D. efficiently, so that stabilization policy is not necessary.
Adverse selection occurs when there is
A) full information. B) unobserved behavior. C) an unobserved characteristic. D) a worker who shirks because his boss does not watch him.