Suppose consumers spent $42 million on Christmas trees last year when the average tree cost $30 and this year spent $42 million when the average tree costs $25 . Assuming nothing else changed, this data suggests that
a. consumers bought the same number of Christmas trees this year as last year
b. the price of Christmas trees stayed the same
c. total revenues to tree producers rose this year
d. the demand for trees is unit elastic
e. the demand for trees is inelastic
D
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In a sense, a cartel is self-destructive because
A) it reduces consumer surplus. B) it sets price above marginal cost. C) each cartel member has the incentive to cheat on the cartel. D) each cartel member earns economic profit.
Using Figure 1.6, if an economy has the capacity to produce represented by PP1, then point E represents
A. An efficient use of resources. B. A change in technology. C. A constant trade-off between cars and SUVs. D. A combination of cars and SUVs that is not attainable.
Which of the following is a positive statement?
A) An unemployment rate of 5.8 percent is too high. B) The unemployment rate is 5.8 percent. C) The unemployment rate should be below 5.8 percent. D) The unemployment rate should never be above 5.8 percent.
Which of the following will cause a reduction in current consumption?
A) a reduction in current disposable income B) a reduction in financial wealth C) a reduction in human wealth D) all of the above E) both B and C