Which of the following generalizations about the benefit of a subsidy is correct?
a. The more inelastic the supply of a product, the larger the portion of the benefit will be to buyers.
b. The more inelastic the demand for a product, the larger the portion of the benefit will be to buyers.
c. The more elastic the supply of a product, the smaller the portion of the benefit will be to buyers.
d. The distribution of the benefit of a subsidy is not affected by the elasticity of the supply and demand for the product for which the subsidy is granted.
B
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The above figure shows Katie's consumption possibilities. The relative price of a movie ticket is
A) 1 restaurant meal. B) 0.25 restaurant meals. C) 4 restaurant meals. D) 2 restaurant meals.
In the simple Keynesian model, equilibrium aggregate output is determined by
A) aggregate demand. B) aggregate supply. C) the national demand for labor. D) the price level.
On the job training:
a. is an important component for building human capital b. may be just as important as formal education in raising productivity c. is less amenable to influence by the government d. All of the above are correct.
The demand for electricity is more elastic in the long run than in the short run because
A. consumers can shift to more efficient electrical appliances in the long run.
B. solar energy will eventually replace electricity in the long run.
C. government regulation of electricity producers is most effective in the long run.
D. more electricity can be produced in the long run.