What does it mean when the demand for a product is inelastic?
a. People will not buy any of the product when the price goes up.
b. A price increase does not have a significant impact on buying habits.
c. Customers are sensitive to the price of the product.
d. There are very few satisfactory substitutes for the product.
Answer: A price increase does not have a significant impact on buying habits.
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The motivation for collective action is to do things that benefit society as a whole
a. True b. False
Which of the following statements is true about comparative advantage?
a. Comparative advantage exists whenever one person, firm, or nation can do something at higher opportunity costs than some other individual, firm, or nation. b. Comparative advantage is interesting theoretically, but it is not relevant when evaluating real-world economic conditions. c. Low income countries cannot possibly have a comparative advantage in the production of any good or service because of the relatively low literacy rate. d. Comparative advantage exists whenever one person, firm, or nation can do something at lower opportunity costs than some other individual, firm, or nation. e. Only technologically advanced economies can have a comparative advantage in the production of a good or service.
Which of the following most clearly indicates that fiscal policy is becoming more restrictive?
a. An increase in the budget deficit relative to GDP b. A reduction in the budget deficit relative to GDP c. An increase in government expenditures as a share of GDP d. A reduction in tax revenues as a share of GDP
Which of the following statements is always true when inflation occurs?
a. The domestic money loses purchasing power. b. Borrowers benefit and lenders suffer. c. The international competitive position of the country is negatively affected. d. All of the above are always true. e. Lenders benefit and borrowers suffer.