When demand is elastic
A. producers react quickly to price changes.
B. the proportional change in quantity demanded is equal to the proportional change in price.
C. quantity demanded is very responsive to a change in price.
D. quantity demanded is not very responsive to a change in price.
Answer: C
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Economic losses caused several firms to leave the car wash business in Portland, Oregon. Though prices have risen, firms are still leaving the industry. Apparently: a. economic profits exist but they are not as high as in other industries
b. economic profits are zero and firms won't stay in the industry if they are not earning an economic profit. c. firms are still generating economic losses. d. economic profits have decreased because of the exit of existing firms.
If the labor force grows faster than the number employed, the
a. unemployment rate will fall. b. unemployment rate will rise. c. labor force rate will rise. d. employment rate will rise.
When the government eliminates artificial barriers to entry:
A. more firms will enter the market. B. prices to consumers will likely increase. C. competition in the market will decrease. D. All of these will occur.