The short-run price elasticity of demand for airline travel is 0.05, while the long-run elasticity is 2.36. This means that a significant increase in airline ticket prices will cause airline companies to:
A. collect less revenue from short-notice travelers.
B. collect more revenue from travelers who book well in advance.
C. lose money on short-notice travelers.
D. collect less revenue from travelers who book well in advance.
Answer: D
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The figure above shows Diane's demand curve for soda. The price of a soda is $1.00. Diane's consumer surplus from all 15 sodas is
A) $15.00. B) $22.50. C) $11.25. D) $8.00. E) $1.50.
Between 1967 and 1999, the industrial structure of the U.S. experienced which of the following changes?
(a) The industries experiencing slow or negative growth—primary metals, transportation, mining and steel—sought protection from competition from the federal government. (b) All major nondurable sectors experienced growth. (c) Machinery and electronics experienced rapid growth. (d) All of the above.
The aggregate demand curve differs from an individual demand curve in that
A) the aggregate demand curve may not slope down while an individual demand curve must always slope down. B) the aggregate demand curve looks at the entire circular flow of income and product, while an individual demand curve looks at one good, holding everything else constant. C) prices change along an individual demand curve but prices are held constant along an aggregate demand curve. D) the aggregate demand curve slopes up while an individual demand curve slopes down.
A $100 billion increase in government purchases will have the same effect on real GDP as a $100billion decrease in net taxes
a. True b. False Indicate whether the statement is true or false