Moving along the aggregate expenditure (AE) curve, when real GDP increases, aggregate planned expenditures increase
A) by the same percentage as does real GDP.
B) by more than real GDP.
C) proportionately with real GDP.
D) by the same amount as does real GDP.
E) by less than real GDP.
E
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Refer to Table 6-2. Assume that an economist has estimated the price elasticity of demand values in the table above. Use the data in the table to select the correct statement
A) The difference in elasticity values is explained by the fact that the more narrowly we define a market the more elastic the demand will be. B) There are fewer substitutes for "All carbonated soft drinks" than there are for "All soft drinks." C) The elasticity for "All soft drinks" is less than the elasticity for Coca-Cola because Coca-Cola is more of a luxury than a necessity; "All soft drinks" represent goods that are more necessity than luxury. D) The demand for Coca-Cola is inelastic.
MPP is the additional output that results from a one-unit increase in use of the input.
Answer the following statement true (T) or false (F)
Many economists believe that skill-biased technical change has increased the incomes of highly skilled workers and decreased the incomes of low-skill workers
a. True b. False Indicate whether the statement is true or false
A firm that has merged with many other firms producing a variety of goods unrelated to each other
a. faces higher risks than if it specialized in one and focused on it b. increases its market share in the industry c. cannot maximize profit although it does maximize sales d. cannot survive in the long run e. is a conglomerate