If the price elasticity of demand is elastic, then:
A. Ed < 1.
B. consumers are relatively not very responsive to a price increase.
C. an increase in the price will increase total revenue.
D. there are likely a large number of substitute products available.
Answer: D
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If the marginal propensity to consume (MPC) is 0.75 and government purchases increase by $200 billion, then
A) equilibrium real Gross Domestic Product (GDP) will increase by $50 billion. B) the effect on equilibrium real Gross Domestic Product (GDP) cannot be determined from the given information. C) equilibrium real Gross Domestic Product (GDP) will increase by $800 billion. D) equilibrium real Gross Domestic Product (GDP) will increase by $200 billion.
The figure above shows the situation facing Smart Digit, Inc, a firm in monopolistic competition that produces calculators. The firm's markup is ________ per calculator
A) zero B) $2 C) $4 D) $6
Suppose the market for autoworkers is initially in equilibrium, but then the automakers purchase capital goods that are a substitute for workers. What happens in the market for autoworkers?
What will be an ideal response?
If we wanted to describe unemployment in terms of supply and demand, we could say:
A. the quantity of those demanding labor is greater than those supplying labor. B. there is a surplus of labor. C. at the prevailing wage, the demand is greater than the supply of labor. D. All of these are true.