Refer to the figure above. Over the $5-$6 range, demand is:
A. elastic.
B. inelastic.
C. perfectly elastic.
D. unitary elastic.
Answer: D
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Gasoline is a normal good. If the price of gasoline falls, a consumer buys more gasoline because of
A) only an income effect. B) only a substitution effect. C) an increase in the marginal rate of substitution. D) both an income effect and a substitution effect.
A prominent aspect of the recent Great Recession, but not of the Great Depression of the 1930s, is ________
A) bank panics B) mortgage defaults C) an increase in the credit spread D) nonconventional monetary policy
The services of real estate brokers are provided in a competitive market. If the state Board of Realtors enacts several requirements that limit the number of real estate brokers, which of the following is most likely to occur?
A) The supply curve of real estate brokers will shift to the left. B) The supply curve of real estate brokers will shift to the right. C) Social welfare will remain unchanged. D) The supply curve will remain unchanged.
Adam Smith's basic economic philosophy stated in The Wealth of Nations can be stated as:
a. laissez faire. b. allow to act. c. the least government is best. d. all of these.