If the absolute value of the price elasticity of demand for tickets to a football game is 2, then if the price increases by 1 percent, quantity demanded decreases by:
A. 4 percent.
B. 0.5 percent.
C. 1 percent.
D. 2 percent.
Answer: D
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If the economy is currently in equilibrium at a level of GDP that is below potential GDP, which of the following would move the economy back to potential GDP?
A) an increase in the value of the dollar relative to other currencies B) a decrease in business confidence C) an increase in wealth D) an increase in interest rates
An individual has an absolute advantage in producing pizzas if that individual:
A. has a higher opportunity cost of producing pizzas than anyone else. B. has a lower opportunity cost of producing pizzas than anyone else. C. charges the lowest price for pizzas. D. can produce more pizzas in a given amount of time than anyone else.
Over time, foreign investment is credited with the greatest contribution to economic growth in the United States.
Answer the following statement true (T) or false (F)
Which of the following is NOT a true statement about the Lorenz curve?
A) The Lorenz curve includes both money income and income in kind. B) The Lorenz curve does not include unreported income obtained from the underground economy. C) The Lorenz curve does not consider different sizes of households. D) The Lorenz curve does not consider age differences among wage earners.