The price elasticity of demand for oil is estimated at 0.05. This value means a 10 percent increase in the
A) quantity of oil demanded will result from a 0.5 percent increase in the price of oil.
B) quantity of oil demanded will result from a 0.5 percent decrease in the price of oil.
C) price of oil will increase the quantity of oil demanded by 0.5 percent.
D) price of oil will decrease the quantity of oil demanded by 0.5 percent.
D
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Pedro's utility of wealth is 6 units for $10,000 and 10 units for $20,000. A friend gave him a lottery ticket for his birthday. The ticket won, giving him either $10,000 with probability 0.5 or $20,000 with probability 0.5
Pedro's expected utility from the lottery ticket is A) between 6 and 8 units. B) equal to 8 units. C) between 8 and 10 units. D) equal to 10 units.
Liquidity increases as we move from the M1 to the M2 definition of the money supply
Indicate whether the statement is true or false
An important condition for a contestable market is:
A. all producers have different technologies. B. there are sunk costs. C. there are high transaction costs. D. existing firms cannot respond quickly to entry by lowering their price.
The determinants of aggregate supply:
A. are consumption, investment, government, and net export spending. B. explain why real domestic output and the price level are directly related. C. explain the three distinct ranges of the aggregate supply curve. D. include resource prices and resource productivity.