A simple linear demand function may be stated as Q = a - bP + cI where Q is quantity demanded, P is the product price, and I is consumer income
To compute an appropriate value for c, we can use observed values for Q and I and then set the estimated income elasticity of demand equal to: A) c(I/Q)
B) c(Q/I)
C) -b(I/Q)
D) Q/(cI)
A
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A constant-cost industry is distinguished by the fact that
a. firms' long-run average cost curves are horizontal b. firms' short-run marginal cost curves are horizontal c. firms' short-run average total costs are horizontal d. the short-run industry supply curve is perfectly elastic e. the long-run industry supply curve is perfectly elastic
The oversimplified formula for the multiplier yields a number that is too large due to the exclusion of
a. variable imports. b. changes in the price-level. c. income taxes. d. All of the above.
A lower price for automobiles would reduce the externalities from automobiles.
Answer the following statement true (T) or false (F)
TARP was
A. the name given to the auto company bailouts. B. the name given to the stimulus package of 2009. C. what kept AIG afloat. D. the name given to the bank bailouts.