Suppose that when price is $10, quantity supplied is 20 . When price is $6, quantity supplied is 12 units. The price elasticity of supply is:
a. 0.5.
b. 0.8.
c. 1.0.
d. 1.5.
e. 2.0.
c
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The relationship between the marginal propensity to consume and the marginal propensity to save is such that
a. MPC – MPS = 0. b. MPC + MPS = 1. c. MPC – MPS = 1. d. MPC = 1/MPS.
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
Briefly explain how scarcity works in the public sector. Give an example that is not in the text.
What will be an ideal response?
Laissez-faire economists favor government intervention in the market process.
Answer the following statement true (T) or false (F)