The income elasticity of demand
A) is positive only.
B) is negative only.
C) must lie between -1 and +1.
D) can be positive, negative, or zero.
D
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Critics of advertising argue that advertising
a. creates demand for products that people otherwise do not want or need. b. lowers barriers to entry into an industry because new firms can more easily establish themselves as competitors. c. increases competition by providing information about prices. d. encourages monopolization of markets by raising entry barriers.
According to the Keynesian savings schedule, when aggregate income increases by a given amount, savings will
A) remain the same B) decrease by the amount of change in income C) increase by the amount of the change in income D) increase by less than the amount of the change in income E) increase by more than the amount of the change in income
Two years ago, when her plant closed, Sue Ann McCoy was earning $18 an hour as an assembly line worker. She is unwilling to accept a large pay cut and has been out of work for three years. She is __________ unemployed.
A. frictionally B. structurally C. cyclically D. seasonally
Refer to the diagrams. With the industry structures represented by diagram:
A. (A) there will be only a normal profit in the long run, while in (B) an economic profit can persist.
B. (A) price exceeds marginal cost, resulting in allocative inefficiency.
C. (B) price equals marginal cost, resulting in allocative efficiency.
D. (B) equilibrium price and quantity will be e and h, respectively.