If the absolute price elasticity of demand is equal to 1 in the short run, then in the long run, other things being equal, the absolute price elasticity of demand will be
A. equal to zero.
B. greater than one.
C. less than one.
D. less than zero.
Answer: B
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Which of the following is not an in-kind subsidy?
a. SNAP (food stamps). b. Low-cost rental housing. c. Medicare. d. Medicaid. e. Unemployment compensation.
In the equation of exchange, velocity of money increases when
a. Y increases without any changes in P and M. b. Y falls without any changes in P. c. M increases without any changes in P and Y. d. P falls without any changes in Y and M.
Assume that Abby, Ben, Clara, Joe, and Matt are the only citizens in a community. A proposed public good has a total cost of $1000. All five citizens will share an equal portion of this cost in taxes. The benefit of the public good is $220 to Abby, $210 to Ben, $210 to Clara, $180 to Joe, and $120 to Matt. In a majority vote, this proposal will most likely be:
A. Accepted; the public good is produced even though it is economically inefficient B. Defeated; the public good is not produced even though it would have been efficient to do so C. Accepted; the public good is produced which is economically efficient D. Defeated; the public good is not produced, which is the proper outcome
When the price of oysters decreases 25%, quantity demanded increases 10%. The price elasticity of demand for oysters is ________ and total revenue from oyster sales will ________.
A. elastic; increase B. elastic; decrease C. inelastic; increase D. inelastic; decrease