If quantity demanded is completely unresponsive to price changes, demand is
A. relatively elastic.
B. relatively inelastic.
C. perfectly elastic.
D. perfectly inelastic.
Answer: D. perfectly inelastic.
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If personal taxes are cut temporarily, the resulting
A. increase in personal saving would be larger than if they were cut permanently. B. decrease in personal saving would be larger than if they were cut permanently. C. decrease in personal saving would be smaller than if they were cut permanently. D. increase in personal saving would be smaller than if they were cut permanently.
The price elasticity of supply is a measure of the responsiveness of:
A. the change in price to the quantity supplied. B. the suppliers with respect to the change in price. C. the quantity supplied to the change in income. D. the quantity supplied to the changes in price.
Suppose at the current level of labor used, MRP = $20 and MFC = $25. To maximize profits, the firm should
A) hire more labor. B) reduce the level of labor. C) maintain the current level of labor. D) expand production.
What effect does the existence of discouraged workers have on the ability of the official unemployment rate to provide accurate information about the extent to which labor is employed?
What will be an ideal response?