The demand curve for a good is horizontal when it is:
A. a unitary elastic good.
B. a perfectly inelastic good.
C. an inferior good.
D. a perfectly elastic good.
Answer: D
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If there are 20 pounds of coffee included in the market basket, how many pounds of tea are included in the market basket?
Examine the following table of data used for a price index and then answer the
question below.
a. 5
b. 10
c. 15
d. 20
Which of the following can cause a leftward shift in the aggregate supply curve?
A. Lower marginal tax rates. B. A major natural disaster such as hurricane or earthquake. C. A bumper agricultural crop. D. Trade liberalization.
The XYZ Corporation can make a real (inflation-adjusted) return on an investment of 9 percent. The nominal rate of interest is 13 percent and the rate of inflation is 7 percent. We can conclude that the:
A. investment will be profitable. B. investment will be unprofitable. C. real rate of interest is 4 percent. D. real rate of interest is 2 percent.
Suppose that the price of cornflakes is $6.75 per box and the price of oatmeal is $4.50 per box. Both boxes contain the same number of ounces of cereal. The relative price of cornflakes in terms of oatmeal is
A) 0.67. B) 1.0. C) 0.75. D) 1.50.