Given that the own-price elasticity of demand for a brand of shoes is -2, if the price rises by 8%, what will happen to the quantity of shoes demanded?
a. It will decrease by 16%
b. It will increase by 16%
c. It will decrease by 1.6%
d. It will decrease by 1.6%
a
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Demand functions are "homogeneous of degree zero in all prices and income.". This means
a. a proportional increase in all prices and income will leave quantities demanded unchanged. b. a doubling of all prices will not alter consumption decisions. c. prices directly enter individuals' utility functions. d. an increase in income will cause all quantities demanded to increase proportionately.
Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Considering both country's production possibilities frontiers, we can conclude that Country B will specialize in:
A. trucks, and be willing to accept no fewer than 3 cars for each truck.
B. cars, and be willing to give no more than 3 cars for each truck.
C. trucks, and be willing to accept no more than 3 cars for each truck.
D. cars, and be willing to give no fewer than 3 cars for each truck.
For movements along the long-run aggregate supply curve...
What will be an ideal response?
The crowding out of private spending by government spending will be greater the
A) less sensitive consumption, investment, and net exports are to changes in interest rates. B) more sensitive consumption, investment, and net exports are to changes in interest rates. C) less sensitive consumption, investment, and net exports are to changes in the price level. D) more sensitive consumption, investment, and net exports are to changes in the price level.