A government wants to reduce electricity consumption by 5%. The price elasticity of demand for electricity is -0.5. The government must ________ the price of electricity by ________.
A. raise; 10.0%
B. raise; 1.0%
C. lower; 0.5%
D. raise; 0.1%
Answer: A
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What are the differences between the four market structures in terms of the number of sellers in the market and the types of products produced?
What will be an ideal response?
TheWall Street Journalreports that “hard times aid poultry companies as people eat cheaper fowl.” In the language of economists, this means
A. chicken is an inferior good. B. chicken has a negative substitution effect. C. chicken has a positive substitution effect. D. people’s tastes change during recessions. E. chicken has a positive income effect.
All of the following are considered input barriers to entry except?:
A) control of a key raw material by a single firm.
B) the ability to obtain financing for capital projects at more favorable rates than potential competitors.
C) the fact that workers in a particular industry belong to a union.
D) a patent on a specialized type of capital that is needed to produce a particular product.
If government spending increases, which causes producers to hire more workers, and as a result households have more income to spend, which causes aggregate demand to increase even more, this is known as the:
A. Magnifying process. B. Multiplier process. C. Saving effect. D. Fiscal effect.