In the $80 to $40 price range in Figure 20.1, demand is
A. Price-inelastic.
B. Perfectly price-elastic.
C. Unitary elastic.
D. Price-elastic.
Answer: A
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Combating recession may require the government to
A. decrease aggregate supply. B. increase aggregate demand. C. decrease aggregate demand. D. decrease government spending.
When estimating GDP using the income approach, aggregate income is adjusted by
A. subtracting depreciation. B. adding depreciation. C. adding net income earned abroad. D. subtracting indirect business taxes.
A small country is considering imposing a tariff on imported wine at the rate of $5 per bottle. Economists have estimated the following based on this tariff amount: World price of wine (free trade):$20 per bottleDomestic production (free trade):500,000 bottlesDomestic production (after tariff):600,000 bottlesDomestic consumption (free trade):750,000 bottlesDomestic consumption (after tariff):650,000 bottles The imposition of the tariff on wine will cause the surplus of the domestic producers to ________ by about
A. rise; $2.75 million. B. fall; $2.5 million. C. rise; $1 million. D. rise; $500,000.
The large-number-of-sellers condition of perfect competition is met when
A. there are more sellers than buyers in the market. B. there are more than 50 firms in the industry. C. there are more than 100 firms in the industry. D. each firm is so small relative to the total market that no single firm can influence the market price.