If price elasticity of supply is less than 1
A) supply is elastic.
B) demand is elastic.
C) demand is inelastic.
D) supply is inelastic.
Answer: D
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If the money price of hats rises and no other prices change, the I. relative price of a hat rises. II. opportunity cost of a hat rises
A) only I B) both I and II C) only II D) neither I nor II
Utility theory assumes that marginal utility of a good
a. increases as an individual consumes more of the good b. decreases as an individual consumes more of the good c. is greater than total utility as long as total utility is greater than zero d. is constant as long as the individual derives utility from the good e. is greater than total utility as long as marginal utility is greater than zero
Which of the following is not correct?
a. Economists are generally united in their support of free trade. b. The conclusions of Adam Smith and David Ricardo on the gains from trade have held up well over time. c. David Ricardo argued that Britain should not restrict imports of grain. d. Economists' opposition to trade restrictions is still based largely on the principle of absolute advantage.
If the U.S. government increased its deficit, then
a. U.S. bonds would pay higher interest but a dollar would purchase fewer foreign goods. b. U.S. bonds would pay higher interest and a dollar would purchase more foreign goods. c. U.S. bonds would pay lower interest and a dollar would purchase fewer foreign goods. d. U.S. bonds would pay lower interest but a dollar would purchase more foreign goods.