Gold is sold in world markets, usually priced in terms of troy ounces. In the market for gold, the price elasticity of demand for gold would be expressed as
A) the number of troy ounces of gold sold.
B) the number of whatever currency is used in purchasing the gold.
C) the number of dollars spent on gold.
D) a unitless number.
Answer: D
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Which of the following is a Pareto improvement?
A) A monopolist loses its monopoly when a government policy allows another firm to enter the market, resulting in lower prices and higher quantity available for consumers. B) A government policy is implemented that results in the middle class being better off, and the very rich only have to pay a little bit more in taxes. C) A government policy removes a market failure. D) None of the above.
Unemployment insurance could affect unemployment by:
A. increasing the equilibrium level of unemployment. B. decreasing the amount of frictional unemployment. C. changing the incentives of those unemployed and looking for work. D. All of these are true.
If the government wanted to encourage home? ownership, it? could:
A. make mortgage interest tax deductible. B. add a? 10% surcharge on every home purchase. C. tax homeowners based on asset values. D. None of the above.
Regarding economic models, which of the following statements is NOT true?
A. An economic model is a simplified representation of a theory or part of a theory. B. An economic model can provide clear answers for policy makers. C. An economic model can clarify an important economic problem. D. An economic model can show three-variable diagrams.