If a straight-line demand curve slopes down, price elasticity will:
A. remain the same at all points on the demand curve.
B. change between any two points along the demand curve.
C. always be greater than one.
D. always equal one.
Answer: B
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In the above figure, 300,000 purses per month is
A) the efficient amount to produce because at 300,000 purses marginal social benefit equals marginal social cost. B) the efficient amount to produce because at 300,000 purses marginal social benefit is greater than marginal social cost. C) an inefficient amount to produce because at 300,000 purses marginal social benefit equals marginal social cost. D) an inefficient amount to produce because producing 500,000 purses sets the marginal social benefit equal to zero.
In an effort to increase government revenue, Congress and the president decide to increase the corporate profits tax. The likely result will be
A) the supply curve for bonds shifts to the left. B) the demand curve for bonds shifts to the left. C) the equilibrium interest rate rises. D) the equilibrium price of bonds falls.
Sticky prices are a direct result of the kinked demand curve
a. True b. False Indicate whether the statement is true or false
If expected future incomes fall, this causes the nation's current:
a. Aggregate demand to fall, the average price level to fall, and real GDP to rise. b. Aggregate supply to rise, the average price level to rise, and real GDP to rise. c. Aggregate demand to rise, the average price level to rise, and real GDP to rise. d. Aggregate supply to fall, the average price level to rise, and real GDP to fall. e. Aggregate demand to fall, the average price level to fall, and real GDP to fall.