A newspaper headline asserts: "Rising demand pulls up copper prices." The headline
A) is claiming demand determines price (rather than price determining demand).
B) is claiming more copper would be demanded at higher prices.
C) is claiming prices will fluctuate indefinitely.
D) is guilty of all three errors mentioned above.
E) makes perfectly good sense from the standpoint of economic theory.
E
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The existence of automatic stabilizers will
A) cause the effects of shocks to aggregate demand to have a larger effect on GDP. B) reduce the recognition lag of discretionary fiscal policy. C) eliminate recessions. D) reduce the size of recessionary and inflationary gaps.
Refer to Figure 6-3. Using the midpoint formula, calculate the absolute value of the price elasticity of demand between e and f
A) 0.32 B) 0.4 C) 2.5 D) 3.125
The marginal revenue product curve shifts when
A) wages fall. B) there is a change in the product price workers are producing. C) wages rise. D) the wages paid exceed the price.
If the government wants to raise tax revenue and shift most of the tax burden to the consumers, it would impose a tax on a good with a
a. flat (elastic) demand curve and a steep (inelastic) supply curve. b. steep (inelastic) demand curve and a flat (elastic) supply curve. c. steep (inelastic) demand curve and steep (inelastic) demand curve. d. flat (elastic) demand curve and a flat (elastic) supply curve.