If the price of a good increases by 10% and the quantity demanded decreases by 5%, then at that price, the good is
A. perfectly inelastic.
B. perfectly elastic.
C. elastic.
D. inelastic.
Answer: D
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Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice. 
Which of the following statements is true?
A. Both the lower-left and upper right cells are Nash equilibria. B. The upper-right cell is the only Nash equilibrium. C. The lower-left cell is the only Nash equilibrium. D. Both the upper-left and lower-right cells are Nash equilibria.
Refer to the above figure. Suppose the natural rate of unemployment is 5 percent. If the government tried to reduce unemployment to 4 percent and keep it there, it must
A) raise unemployment benefits. B) accept a permanent inflation rate of 1 percent. C) generate higher and higher inflation rates or else people will adjust their behavior and the unemployment rate will return to 5 percent. D) use contractionary fiscal and expansionary monetary policy.
The U.S. military aircraft industry sought protection from foreign competition by using the __________ argument to persuade Congress to impose trade restrictions
a. infant industries b. diversity of industries c. retaliation d. antidumping e. national security
In a market where the seller has more information than the buyer,
A. the seller can never gain by increasing the buyer’s information. B. both the buyer and seller can gain by increasing the buyer’s information. C. the buyer can never gain from increasing the seller’s information. D. the buyer can only gain from additional information if it is costless.