Generally, a firm is more willing and able to increase quantity supplied in response to a price change when
a. the relevant time period is short rather than long.
b. the relevant time period is long rather than short.
c. supply is inelastic.
d. the firm is experiencing capacity problems.
b
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If a drought reduced by 20 percent the quantity of wheat available for consumption, by how much would the price of wheat have to rise to clear the market if the price elasticity of demand was .25?
A) 4 percent B) 4.5 percent C) 5 percent D) 25 percent E) 80 percent
Money serves as ________
A) a unit of account B) a store of value C) a medium of exchange D) all of the above E) none of the above
Which of the following is NOT a reason why some industries are oligopolies?
A) economies of scale B) barriers to entry C) strategic independence D) mergers
Which best describes the Keynesian transmission mechanism when the money supply increases?
A) The interest rate rises; this in turn reduces investment spending, which in turn raises total expenditures and shifts the AD curve rightward. B) The interest rate falls; this in turn stimulates investment spending, which in turn raises total expenditures and shifts the AD curve leftward. C) The interest rate falls; this in turn stimulates investment spending, which in turn raises total expenditures and shifts the AD curve rightward. D) The interest rate falls; this in turn stimulates investment spending, which in turn lowers total expenditures and shifts the AD curve leftward.