Along the elastic portion of a demand curve, the
A. change in price will always be greater than the change in quantity demanded.
B. percentage change in quantity demanded will be less than the percentage change in price.
C. change in price will always be less than the change in quantity demanded.
D. percentage change in price will be less than the percentage change in quantity demanded.
Answer: D
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Social cooperation by means of voluntary contracts and exchanges
A) cannot occur in a socialist economic system. B) cannot occur where government sets rules that restrict behavior. C) is easier to achieve when the laws of the society are clear and unchanging. D) is harder to achieve when the members of the society own very little material property in common.
The following is an example of risk aversion
a. those applying for a well-paid job tend to be the most qualified b. more reckless drivers opt for cars with fewer safety devices c. the contractor with the lowest bid for a is under-qualified d. Initial Public Offerings (IPOs) seek investors when prospects look good
A tax on insulin is likely to cause a very large deadweight loss to society
a. True b. False Indicate whether the statement is true or false