If the quantity supplied of candy increases by 1% when the price of candy increases by 5%, which of the following is TRUE?
A. Supply for candy is inelastic, and price elasticity of supply = 0.2.
B. Supply for candy is elastic, and price elasticity of supply = 0.2.
C. Supply for candy is inelastic, and price elasticity of supply = 2.0.
D. Supply for candy is elastic, and price elasticity of supply = 2.0.
Answer: A
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Refer to Figure 8.2. At P = $80, the profit-maximizing output in the short run is
A) 22. B) 34. C) 39. D) 50. E) 64.
If the inflation rate in 2014 was 12.5 percent and the price index for 2012 (the base year) was 100, the price index for 2014 was _____
a. 120.5 b. 121.5 c. 112.5 d. 102.5
When prices are rising:
A. the Lespeyres index tends to overstate the increase in the cost of living because of the substitution bias. B. the Lespeyres index tends to understate the increase in the cost of living because of the substitution bias. C. the Lespeyres index tends to overstate the increase in the cost of living because of the compensating variation bias. D. the Lespeyres index tends to understate the increase in the cost of living because of the consumer preference bias.
Which of the following is NOT part of the "four-legged stool" of retirement income?
A. Individual savings B. Employer retirement plans C. Social Security D. Full-time work