You would expect the price elasticity of demand for transportation generally to be:
A. less than price elasticity of the demand for bus tickets.
B. the same as price elasticity of the demand for bus tickets.
C. greater than price elasticity of the demand for bus tickets.
D. greater than price elasticity of the demand for bus tickets when bus tickets are expensive, but less than price elasticity of the demand for bus tickets when the prices of bus tickets fall.
Answer: A
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A) moral hazard; conflicts of interest B) adverse selection; conflicts of interest C) moral hazard; spinning D) adverse selection; spinning
According to Okun's Law, if unemployment rises by 5 percent while imports and exports increase at roughly the same rate, the economy will lose output equal to
A. 1 percent. B. 10 percent. C. 2 percent. D. 5 percent.
If the MPS is only half as large as the MPC, the multiplier is:
A. 2. B. 3. C. 4. D. 5.
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