In the specific factors model, a 5% decrease in the price of food accompanied by a 5% decrease in the price of cloth will cause ________ in the welfare of labor, ________ in the welfare of the fixed factor in the production of food, and ________ in
the welfare of the fixed factor in the production of cloth. A) no change; no change; no change
B) an increase; an increase; an increase
C) a decrease; an increase; an increase
D) an increase; a decrease; a decrease
E) a decrease; a decrease; a decrease
A
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If the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good, then the demand for the good is _____
a. inelastic b. relatively elastic c. unit-elastic d. perfectly inelastic e. income elastic
The money supply and money demand curves are _____ and ______ respectively. a. Vertical; downward sloping
b. Upward sloping; vertical c. Upward sloping, downward sloping d. None of the above
Suppose that a competitive firm's marginal cost of producing output q is given by MC = 5 + 2q. Assume that the market price of the firm's product is $27. What level of output will the firm produce?
What will be an ideal response?
The median voter model implies that
A) people in the political middle will be dissatisfied with the amount of spending on government funded projects. B) spending on government funded projects reflects the preferences of only those far away from the median. C) many people will be satisfied with the amount of spending on government funded projects. D) many people will be dissatisfied with the amount of spending on government funded projects.