When calculating the price elasticity of demand, we assume that the price of the good changes while all other variables affecting
a. demand except buyers' incomes remain constant
b. demand except the population size remain constant
c. demand and supply remain constant
d. supply remain constant
e. demand remain constant
E
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A monopolistic competitor earns zero economic profits if ________
A) price is higher than average total cost B) price is lower than marginal cost C) price is equal to marginal cost D) price is equal to average total cost
If Treasury deposits at the Fed are predicted to ________, the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves
A) rise; defensive; drain B) fall; defensive; drain C) rise; dynamic; inject D) fall; dynamic; drain
Which of the following best describes typical employer attitudes toward organized labor (unions) during the 19th century?
(a) Positive—unions could promote cooperation with management to achieve more efficient operations (b) Negative—union-promoted labor gains seized profits and encouraged inefficient behavior (c) Indifferent—unions had little impact on business profitability (d) Mixed—about half of employers favored unions and half opposed them
What effect would a Federal balanced budget requirement have on automatic stabilizers?
a. They would be stopped because in a recession automatic stabilizers increase the deficit by automatic spending. b. They would be stopped because in a recession automatic stabilizers decrease the deficit by automatic spending. c. They would become more important because in a recession they would increase spending and taxes automatically. d. They would become more important because in a recession they would decrease spending and taxes automatically.