The percentage change in the quantity supplied of a good or service when its price changes by one percent is:
A. income elasticity of supply.
B. cross-price elasticity.
C. price elasticity of supply.
D. price elasticity of demand.
Answer: C
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According to some New Keynesian theories, one possible rationale for active policy making is
A) growing competition in U.S. product markets. B) flexible prices. C) sluggish adjustment of the price level in response to changes in aggregate demand D) people are not rational and so do not react to incentives.
What would be the output combination for two products A and B on the production possibility frontier, if a country uses its entire resources for producing A?
a. A - Maximum; B - Zero b. A- Maximum, B - Maximum c. A - Zero, B - Maximum d. A - Zero, B - Minimum
Which of the following is often the result of free entry into monopolistic competition?
a. Losses increase while profits decrease in the long run. b. Losses are often magnified in the long run. c. Profits are often eliminated in the long run. d. Profits often increase in the long run.
Discuss the consensus on the adjustment process after the crisis
What will be an ideal response?