If the quantity demanded of a product is the same for each possible price, demand is
A) unit-elastic.
B) elastic.
C) perfectly elastic.
D) perfectly inelastic.
Answer: D
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Consider the production function for bottled water. All of the following would be considered variable inputs except:
A) the plastic bottles. B) the water the bottles are filled with. C) the machine used to fill each bottle. D) the electricity used to power the machine used to fill the bottles.
When recessions occur, advocates of small government should recommend
a. reductions in the number of federal employees. b. reductions in transfer payments. c. reductions in taxes. d. increases in transfer payments and government spending.
The traditional view of the production process is that capital is subject to
a. constant returns. b. increasing returns. c. diminishing returns. d. diminishing returns for low levels of capital, and increasing returns for high levels of capital.
According to purchasing-power parity, if over the course of a year the price level in the U.S. rises more than in Canada, then which of the following rises?
a. the U.S. real exchange rate, but not the U.S. nominal exchange rate b. the U.S. nominal exchange rate, but not the U.S. real exchange rate c. the U.S. nominal exchange rate and the U.S. real exchange rate d. neither the real exchange rate nor the nominal exchange rate