The elasticity of supply measures the sensitivity of
A) supply to changes in costs.
B) quantity supplied to quantity demanded.
C) quantity supplied to a change in price.
D) price to changes in supply.
C
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An increase in the rate of economic growth curve could be caused by all of the following except
A. a national tax that encourages all employers to provide more training and education for employees which leads to an across-the-board upgrade of the skill level of the nation's workforce. B. a movement along the production possibilities curve so that the society produces more consumer goods and less capital goods. C. an increase in immigration that increases the country's labor force by 20 percent. D. an increase in research and development spending for space technology that improves the quality of the nation's capital stock.
A market has four individuals, each considering buying a grill for his backyard. Assume that grills come in only one size and model. Abe considers himself a grill-master, and finds a grill a necessity, so he is willing to pay $400 for a grill. Butch is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Collin just met the girl of his dreams, and she loves a good grilled steak, so in his effort to impress her he is willing to pay $320 for a grill. Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp, so he is willing to pay $200 for a grill.
If the market price of grills is $350, given the scenario described, total consumer surplus would be: A. $750. B. $400. C. $50. D. $870.
When an economy is operating at its full employment rate of output:
a. the rate of unemployment will be zero. b. output will exceed the economy's maximum sustainable rate. c. the actual rate of unemployment will equal the natural rate. d. the economy's potential rate of output will exceed actual GDP.
Keynesian analysis indicates that an unexpected decline in aggregate demand will lead to
a. a reduction in inventories and an expansion in employment. b. an increase in inventories and a reduction in output. c. lower interest rates, which will stimulate aggregate demand and keep the economy at full employment. d. a lower price level, which will quickly guide the economy to full-employment equilibrium.