Which of the following goods is least likely to be in a market basket?
A. Shuttle service
B. Airfare
C. Streetlamps
D. Coffee beans
C. Streetlamps
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
There is no elasticity of substitution that is inconsistent with tastes being homothetic.
Answer the following statement true (T) or false (F)
The per-person production function in Chapter 10 assumes that a one percent rise in (K/N) causes a ________ rise in (Y/N), and so it is diagrammed as a ________ line
A) less-than-one-percent, downward-curling B) less-than-one-percent, upward-curling C) one percent, upward-curling D) one percent, downward-curling E) more-than-one-percent, straight
The key disadvantage of the kinked-demand model is that it:
A) explains why firms may collude, but it does not explain how they interact. B) does not explain why prices may be rigid in an oligopoly. C) requires the assumptions of perfect competition. D) only holds under price leadership.