Which of the following statements about the price elasticity of demand along a downward-sloping linear demand curve is true?
A) It is inelastic at high prices and elastic at low prices.
B) It is unit elastic throughout the demand curve.
C) It is elastic at the highest prices and inelastic at the lowest prices.
D) It is perfectly elastic at very high prices and perfectly inelastic at very low prices.
Answer: C
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Which of the following is an example of an intermediate good?
A. An antique car sold to the highest bidder B. A pair of skis sold by a sporting goods retailer to a skier C. The lumber produced by Boise Cascade and sold to a builder of old houses D. A share of IBM stock
Refer to the scenario above. What is the number of employed workers in the economy?
A) 1 million B) 2 million C) 3 million D) 4 million
When workers earn below-subsistence wages in a free market economy, some workers will starve. As a result, the supply of labor curve will shift:
A. rightward, causing the wage to rise. B. leftward, causing the wage to fall further. C. leftward, causing the wage to rise. D. rightward, causing the wage to fall further.
According to the policy irrelevance proposition
A) monetary policy can effectively reduce the rate of unemployment in the short run. B) workers are not rational in the long run. C) expansionary monetary policy will only lead to a higher rate of inflation in the long run. D) the Phillips curve slopes upward, not downward as traditionally assumed.