If the demand function for a particular good is Q = 20 ? 8P, then the price elasticity of demand (in absolute value) at a price of $1 is:
A. 1/8.
B. 2/3.
C. 8.
D. 2.
Answer: B
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The above figures show the market for HD televisions. If people's incomes increase and HD televisions are a normal good, which figure shows the effect of this change?
A) Figure A B) Figure B C) Figure C D) Figure D E) None of the figures represent this change.
With time, which one of the following strategies would most likely result in an outward shift in the production possibilities curve of an economy?
a. passage of legislation reducing the workweek to 30 hours. b. instituting a tax policy encouraging consumption at the expense of investment. c. instituting a tax policy encouraging investment at the expense of consumption. d. an increase in the marginal income tax rate, which would reduce the work effort of individuals.
An aggregate supply curve that slopes upward must be:
A. a short-run curve. B. a long-run curve. C. an individual firm's supply curve. D. an individual industry's supply curve.
New classical economists believe that
A. wage and price controls are needed to help control inflation. B. governmental intervention is destabilizing and harmful to the economy. C. the federal government has abdicated its responsibility to promote a non-inflationary full employment economy. D. antitrust laws should be toughened in order to restrain inflation.