Consider the demand curve above. If area 0ABC is smaller than area 0DEF, we may conclude that demand in this range is:
A. income-elastic.
B. price-elastic.
C. price-inelastic.
D. income-inelastic.
Answer: B
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If the real interest rate falls, people decide to ________ because the opportunity cost of ________
A) decrease their consumption expenditure; consumption has decreased B) increase their consumption expenditure; consumption has decreased C) increase their consumption expenditure; saving has decreased D) save more; saving has decreased E) None of the above answers is correct.
The structural deficit or surplus is the
A) difference between actual government outlays and what would be government revenues if the economy were at full employment. B) difference between actual government outlays and actual government revenues. C) change in national debt that will result from current budgetary policies. D) actual government budget deficit or surplus minus expenditures for capital improvements. E) government budget deficit or surplus that would occur if the economy were at full employment.
If the wage rate rises, labor's share in the total costs of a production process:
a. will increase. b. will decrease. c. may increase or decrease depending on the elasticity of demand for the product. d. may increase or decrease depending on the ease of substitution of other inputs for labor.
Which of the following does a monopoly control, that a perfectly competitive firm does not control?
a. how much to produce b. technology c. what price to charge d. what inputs to use e. plant size