There is no rational explanation how government can fund anti-smoking campaigns and tobacco subsidies simultaneously
a. True b. False
b
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If a 1 percent increase in the price of X increases the quantity demanded of Y by 2 percent, then X and Y are
A) complements and the cross elasticity of demand equals 2. B) substitutes and the cross elasticity of demand equals 1/2. C) substitutes and the cross elasticity of demand equals 2. D) complements and the income elasticity of demand equals 2. E) normal goods and the income elasticity of demand of each equals 2.
"A drop in government expenditures lowered output in the short run, but left output unaffected in the long run." This statement implies that the price level __________ in the long run, causing the interest rate to __________
A) rose; rise B) rose; fall C) fell; rise D) fell; fall
For the perfectly competitive firm, price
A. equals average total cost. B. equals average revenue and marginal revenue. C. changes as output changes. D. depends on the fixed cost for the firm.
Refer to the diagram. If actual production and consumption occur at Q2,
A. an efficiency loss (or deadweight loss) of e + f occurs. B. efficiency is achieved. C. an efficiency loss (or deadweight loss) of a + b + c + d occurs. D. an efficiency loss (or deadweight loss) of a + c occurs.