It is argued that, with a rising demand for college education, if the supply were to made to become more elastic then college tuition costs would:
A. Rise faster
B. Decrease slowly
C. Increase more slowly
D. Decrease steeply
C. Increase more slowly
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Suppose a new Dunkin' Donuts shop has opened in town. Its main competitor, Doughnut Delite, will likely
a. begin to produce more doughnuts. b. experience higher marginal costs. c. reduce its prices and production. d. make no changes in its pricing and production decisions.
What effect did the decrease in the value of the dollar have on the U.S. trade deficit in the period from 2006 to 2009?
A. It decreased the trade deficit as Americans bought more U.S. capital goods. B. It decreased the trade deficit as foreigners were attracted to the increased value of U.S. products and Americans bought fewer imports. C. It increased the trade deficit as U.S. investors bought more domestic financial assets. D. It increased the trade deficit as Americans bought more imports and foreigners bought fewer U.S. products.
In the classical model, an increase in the unemployment rate
A) will result in an increase in the price level if the reduction in output is caused by a change in aggregate demand. B) will likely be temporary. C) is a signal of demand-pull inflation. D) will persist when the reduction in output is caused by a reduction in aggregate demand.
If the demand for a good is elastic, the price elasticity of demand is ________
A) greater than 1 B) equal to 1 C) between 0 and 1 D) less than zero