A 2 percent rise in the price of a good leads to a 4 percent decrease in quantity demanded. The absolute price elasticity of demand is
A) 2.
B) 0.5.
C) 20.
D) 5.
Answer: A
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Moving upward along the aggregate supply curve is equivalent to
A) moving downward along the short-run Phillips curve. B) shifting the short-run Phillips curve leftward. C) shifting the short-run Phillips curve upward. D) moving upward along the short-run Phillips curve. E) shifting the short-run Phillips curve rightward.
A firm will maximize profit at the level of output where:
A) its marginal revenue equals total cost. B) its marginal revenue equals marginal cost. C) its total cost equals total revenue. D) its average revenue equals average cost.
With fixed exchange rates, an increase in the foreign inflation rate, with constant income and domestic credit, will lead to
A) a change in the exchange rate. B) an increase in international reserves. C) a decrease in international reserves. D) no change in international reserves.
Determinants of the marginal productivity of labor include all of the following EXCEPT
A. location. B. education. C. talent. D. experience.