The price elasticity of demand for food is
A. Perfectly inelastic.
B. Perfectly elastic.
C. Relatively inelastic.
D. Relatively elastic.
Answer: C
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If the prices of both goods and income increase by the same percentage, what will happen to the budget line?
A) The budget line rotates inward from the intercept on the axis of the good that did not change in price. B) The budget line rotates outward from the intercept on the axis of the good that did not change in price. C) The budget line shifts outward without a change in slope. D) Nothing.
Suppose the Pleasant Corporation cuts the price of its American Girl dolls by 10 percent, and as a result, the quantity of the dolls sold increases by 25 percent. This indicates that the price elasticity of demand for the dolls over this range is:
a. 2.5. b. 0.4. c. 0.5. d. 5.0.
The ____ phase of the business cycle follows a recession
a. recovery b. recession c. peak d. trough
In the analysis of potential GDP, labor and capital are considered
a. inputs. b. final goods and services. c. byproducts of economic growth. d. outputs.