The following data relate to the supply schedule of a product.PriceQuantity Supplied$51001020015250203002535030500Using the regular percentage change formula, what is the price elasticity of supply when price decreases from $10 to $5?
A. perfectly elastic
B. unit elastic
C. elastic
D. inelastic
Answer: B
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Policies based on normative economic ideas tend to increase economic efficiency and improve equity
Indicate whether the statement is true or false
Omitted variable bias
A) will always be present as long as the regression R2 < 1. B) is always there but is negligible in almost all economic examples. C) exists if the omitted variable is correlated with the included regressor but is not a determinant of the dependent variable. D) exists if the omitted variable is correlated with the included regressor and is a determinant of the dependent variable.
Suppose the economy is in long-run equilibrium. If the government increases its expenditures, eventually the increase in aggregate demand causes price expectations to
a. rise. This rise in price expectations shifts the short-run aggregate supply curve to the right. b. rise. This rise in price expectations shifts the short-run aggregate supply curve to the left. c. fall. This fall in price expectations shifts the short-run aggregate supply curve to the right. d. fall. This fall in price expectations shifts the short-run aggregate supply curve to the left.
The use of government regulations to make companies use new technology to reduce pollution is complicated by the fact that ______.
a. technology that eliminates one type of pollution creates equal amounts of another b. such regulations would externalize the internal costs of pollution control c. the government has no legal authority to enforce regulations limiting pollution d. regulators would have to know about specific technology for each industry