The price elasticity of demand for a good is relatively elastic if:
A. there are a large number of substitutes.
B. the consumer has more time to make decisions about purchasing the good.
C. the good is less of a necessity.
D. All of these
Answer: D
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
The existence of a universal law of scarcity creates pressures on societies to
A. use their resources according to government plans. B. economize in the use of their resources. C. allocate their resources equitably. D. exploit their resources.
A French worker can produce either 4 barrels of wine or 16 shirts a week; and Italian worker can produce either 10 barrels of wine or 20 shirts a week.
A. After the countries begin to trade, one barrel of wine will cost between four and eight shirts. B. France has an absolute advantage in both wine and shirts. C. France will export shirts and import wine. D. France has an absolute advantage in making shirts.
The market equilibrium quantity:
A. is sometimes the socially optimal quantity B. is the socially optimal quantity C. maximizes total economic surplus D. is not the socially optimal quantity