Suppose the price elasticity of demand for oil is 0.1. In order to lower the price of oil by 20 percent, the quantity of oil supplied must be increased by.
A) 200 percent
B) 20 percent
C) 2 percent
D) 0.2 percent.
Ans: C) 2 percent
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Between 1981 and 2012, the United States
A) had a current account surplus almost every year. B) some years had a deficit and some years had a surplus that totaled a surplus of $2.5 trillion. C) had a current account surplus or deficit that almost equal to $0 every year. D) had a current account deficit almost every year. E) some years had a deficit and some years had a surplus that netted out to $0.
Two countries will choose to specialize and trade only if:
A. the terms of trade fall between their opportunity costs for producing the goods on their own. B. the opportunity costs are the same for the two nations. C. the opportunity costs are astronomically high for producing the goods on their own. D. one country possesses the absolute advantage in both goods, but the comparative advantage in only one good.
In which of the following is the relationship of price (P) to marginal cost (MC) such that the gains to society as a whole from producing additional marginal units will be greater than the costs?
a. P = MC b. P > MC c. P > MC d. P / MC
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD 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. D; B C. A; B D. B; C