If the price elasticity of supply is 1, supply is:
A. unaffected by price changes.
B. inelastic.
C. unit elastic.
D. elastic.
Answer: C
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A currency appreciation should
A. reduce net exports and therefore increase aggregate demand. B. raise net exports and therefore decrease aggregate demand. C. reduce net exports and therefore decrease aggregate demand. D. raise net exports and therefore increase aggregate demand.
In France, two qualities of wines are produced - table wine sold in bulk (bring your own bottle) and a higher quality of wine. Suppose that the English import all their wine from France. Then, we would we expect to find, on average that
a. the English drink more of the higher quality of wine, because transportation costs will lower the relative price of high-quality wine relative to table quality wine. b. the English will drink more table quality wine, because transportation costs will raise the relative price of table quality wine to high-quality wine. c. the French will drink more of the high quality wine because transportation costs reduce demand for wine in England. d. the French will drink more of the high quality wine because the wine is produced there.
Which of the following will cause a decrease in the standard of living for an individual?
A. a decrease in socioeconomic status B. an increase in wealth C. an increase in income D. a decrease in disease
A firm's long-run average cost curve shows the ________ average cost at which it is possible to produce each output when the firm has had ________ time to change both its labor force and its plant
A) highest; sufficient B) lowest; sufficient C) lowest; insufficient D) highest; insufficient E) average; sufficient