Related to the Economics in Practice on page 102: Harriet runs a corner delicatessen and one day decides to raise her prices by 20 percent. Total revenue is likely to ________ when she first raises prices since demand is relatively ________ in the short term.
A. fall; inelastic
B. fall; elastic
C. rise; inelastic
D. rise; elastic
Answer: C
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According to the textbook application, radon
a. is a naturally occurring hazard b. is an involuntary risk c. poses no adverse health threat outdoors d. all of the above e. (a) and (b) only
A structured and simplified version of reality that can be used to explain real-world behavior is called
A) an economic model. B) a rationality assumption. C) a postulate. D) a normative alternate reality.
In 2012, consumers in Dexter consumed only books and pens. The prices and quantities for 2012 and 2013 are listed in the table above. The reference base period for Dexter's CPI is 2012. What is the CPI in 2012?
A) 320 B) 1.00 C) 3.20 D) 100
For each of the following scenarios, state the short-run effect on the AD curve
a. The price level decreases. b. The target inflation rate increases. c. The U.S. dollar falls in value relative to other currencies. d. Government spending increases. e. The Fed becomes more tolerant of deviations from the target inflation rate.