Refer to the accompanying figure. If P = $6, then the price elasticity of supply is:
A. less than zero
B. positive, but less than one
C. greater than one
D. one
Answer: C
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Because prices are slow to move in the short-run, when the Federal Reserve lowers the federal funds rate
A) nominal interest rates rise. B) real interest rates fall. C) inflation falls. D) real interest rates rise.
If Ford raises the price of its automobiles, the demand curve for GM automobiles
a. shifts to the left b. is unaffected c. becomes more elastic d. shifts to the right e. becomes vertical
The opportunity costs associated with the use of resources owned by a firm are:
A. externalities. B. implicit costs. C. explicit costs. D. sunk costs.
According to Keynes, the primary cause of large-scale unemployment is
A. low prices. B. high exports. C. low exports. D. inadequate aggregate demand.