Figure 7-9
At a price of $10, the price elasticity of the demand curve depicted in is
a.
positive.
b.
approximately equal to -0.1.
c.
approximately equal to -1.
d.
approximately equal to -2.
c
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When the economy is at full employment and inflation develops, the government creates a surplus budget by cutting its own spending and raising taxes. The Fed would
a. reduce the legal reserve requirement, increase the discount rate, and buy securities on the open market b. reduce the legal reserve requirement, reduce the discount rate, and sell securities on the open market c. reduce the legal reserve requirement, reduce the discount rate, and buy securities on the open market d. increase the legal reserve requirement, reduce the discount rate, and sell securities on the open market e. increase the legal reserve requirement, increase the discount rate, and sell securities on the open market
A government surplus has the effect of :
a. Increasing the demand for real loanable funds, increasing the real risk-free interest rate, and increasing the quantity supplied of real loanable funds per period. b. Increasing the supply of real loanable funds, reducing the real risk-free interest rate, and increasing the demand for real loanable funds. c. Decreasing the supply of real loanable funds, increasing the real risk-free interest rate, and decreasing the quantity demanded of real loanable funds per period. d. Decreasing the supply of real loanable funds, increasing the real risk-free interest rate, and decreasing the demand for real loanable funds per period. e. Increasing the supply of real loanable funds, reducing the real risk-free interest rate, and increasing the quantity demanded of real loanable funds per period.
Supply and demand analysis can explain:
A. the initial set of property rights but not how much rent will accrue to a landholder. B. neither the initial set of property rights nor how much rent will accrue to a landholder. C. how much rent will accrue to a landholder and the initial set of property rights. D. how much rent will accrue to a landholder but not the initial set of property rights.
An increase in the price of a product will reduce the amount of it purchased because:
A. supply curves are upsloping. B. consumers substitute relatively high-priced for relatively low-priced products. C. the higher price means that real incomes have risen. D. consumers will substitute other products for the one whose price has risen.