The elasticity of demand can change with
A. the time available to shift to other alternatives.
B. the number of close substitutes.
C. neither a) nor b).
D. both a) and b).
Answer: D
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The natural rate of unemployment worsens if:
a. Actually, the natural rate cannot worsen. That's why it's called "natural." b. Labor force mobility worsens. c. Capital markets become more competitive. d. A nation's resource endowments expand. e. Real wages become more flexible.
Country A and country B are the same except country A currently has more capital. Assuming diminishing returns, if both countries increase their capital by 100 units and other factors that determine output are unchanged, then
a. output in country A increases by more than in country B. b. output in country A increases by the same amount as in country B. c. output in country A increases by less than in country B. d. None of the above is necessarily correct.
Reductions in private spending as a result of increased government spending or the need to finance a budget deficit is called
A) pushing in. B) rushing forth. C) crowding in. D) crowding out.
Which of the following is a characteristic of a competitive price-taker market?
A. Profit maximizing firms in the market will expand output until price equals average variable cost. B. The market demand curve for the product is a horizontal line. C. There are many firms in the market, each producing a small share of total market output. D. The product produced by each of the firms is differentiated.