A decrease in supply will cause the smallest increase in price when
a. both supply and demand are inelastic.
b. demand is elastic and supply is inelastic.
c. both supply and demand are elastic.
d. demand is inelastic and supply is elastic.
c
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Nobody needs soda. So why do people drink it?
A) They deny the data and believe they really do need soda. B) The expected additional benefits of another soda outweigh the additional costs. C) There are no substitutes for soda. D) Soda is a good for the people who consume it, and therefore they will drink it at any price.
In general we may note that inflation:
A. doesn't necessarily harm purchasing power. B. always decreases purchasing power. C. always increases purchasing power. D. should try to be avoided at all costs.
Carefully define the following terms and explain their importance in the study of macroeconomics:
a. expenditure schedule b. saving schedule c. equilibrium GDP d. leakages schedule e. injections schedule
Economists at the Department of the Treasury
a. design U.S. currency and coins. b. provide Congress with the annual budget. c. enforce the U.S. antitrust laws. d. provide advice on tax policy to the President.