The price elasticity of demand for bread
a. is computed as the percentage change in quantity demanded of bread divided by the percentage change in price of bread.
b. depends, in part, on the availability of close substitutes for bread.
c. reflects the many economic, social, and psychological forces that influence consumers' tastes for bread.
d. All of the above are correct.
d
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If the market price is $25 in a perfectly competitive market, the marginal revenue from selling the fifth unit is
A) $5. B) $12.50. C) $25. D) $125.
Public choice theory indicates that representative government yields outcomes more consistent with economic efficiency when a close relationship exists between the benefits received and the costs borne by each voter. Which of the following methods of financing a government program will most likely result in a close relationship between voter benefits and costs?
a. progressive income tax b. retail sales tax c. property tax d. user charges
The usual results of an adverse supply shock are
a. a rise in prices and a fall in output. b. a fall in prices and a rise in output. c. increased growth and lower inflation. d. a rise in prices and a rise in output.