Until recently, the elasticity of demand for cigarettes by adults was such that an increase in cigarette taxes to one dollar would
A. cut adult smoking by around 10%.
B. cut adult smoking by half.
C. actually increase adult smoking.
D. have absolutely no effect of adult smoking.
Answer: A
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Suppose that the absolute price elasticity for cookies equals 0.9. We could then say that the demand for cookies is
A) elastic. B) inelastic. C) unit-elastic. D) perfectly elastic.
An example of an excludable good or service is a:
A. movie in a theater. B. city park. C. rainbow. D. levee system.
Answer the following statements true (T) or false (F)
1. The GDP excludes the production of services for which no monetary transaction takes place. 2. Corporate profits are included in national income but not in personal income. 3. Interest payments are included in national income but not in personal income. 4. Gross national product measures the current market value of final output produced within a country by both domestic and foreign resources. 5. The GDP implicit price deflators take into account price changes, as well as some changes in the quality of various products.
Sam decides to buy a $75 ticket to a particular New York professional hockey game rather than a $50 ticket for a particular Broadway play. We can conclude that Sam:
A) is relatively unappreciative of the arts. B) obtains more marginal utility from the play than from the hockey game. C) has a higher "marginal utility to price ratio" for the hockey game than for the play. D) has recently attended several other Broadway plays.