If consumers' buying decisions are not very sensitive to changes in price, then their demand is:
A. more elastic.
B. less elastic.
C. perfectly inelastic.
D. unit elastic.
B. less elastic.
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Suppose Q = KaLb, if a + b < 1 the isoquants will be
a. upward sloping. b. progressively closer together at higher quantities. c. progressively further apart at higher quantities. d. equally spaced.
What is the marginal propensity to consume for the economy described in Scenario 10.1?
a. 0.45 b. 0.85 c. 0.65 d. 0.35 e. Cannot be determined
If consumers completely cease purchasing a product when its price increases by any amount, then demand is:
A. unit elastic. B. perfectly inelastic. C. inelastic. D. perfectly elastic.
What impact do transfer payments have?
A. They increase the incentive to work and shift AS to the left. B. They increase the incentive to work and shift AS to the right. C. They reduce the incentive to work and shift AS to the right. D. They reduce the incentive to work and shift AS to the left.