We generally expect the price elasticity of supply to be
A) zero.
B) negative.
C) positive.
D) positive or negative, depending on demand.
Answer: C
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Suppose the economy is initially experiencing a recessionary ga
A) a reduction in the size of the recessionary gap and increase in real GDP. B) an increase in the size of the recessionary gap and decrease in real GDP. C) an inflationary ga
Suppose the demand curve for a product is downward sloping and the supply curve is upward sloping. If a unit tax is imposed in the market for this product,
A) sellers bear the entire burden of the tax. B) the tax burden will be shared among the government, buyers and sellers. C) the tax burden will be shared by buyers and sellers. D) buyers bear the entire burden of the tax.
Disposable income is not:
A. the amount consumers have to spend on goods and services. B. income before tax. C. what consumers base their buying decisions on. D. total income minus taxes.
Advertising can impede economic efficiency when it:
A. reduces entry barriers. B. reduces brand loyalty. C. leads to greater monopoly power. D. provides consumers with useful information about product quality.