If a 10 percent rise in airfares leads to a 5 percent increase in total expenditures on air travel, the price elasticity of demand for air travel in this range must be
a. 2.
b. elastic.
c. 0.5.
d. inelastic.
D
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Refer to the scenario above. Suppose a country is currently at point C. Which of the following will happen if it experiences an improvement in technology?
A) It will move from point C towards point D. B) The curve will shift upward. C) It will move from point C toward point A. D) The curve will shift downward.
Which of the following statements is true of the scientific method?
A) The scientific method may not reveal a "true" model of the world. B) The scientific method does not require the models to be tested with data. C) The scientific method used by economists and scientists is independent of empiricism. D) The scientific method can help develop accurate models even when data are unavailable.
The SAS curve shifts if there is a change in the price level
Indicate whether the statement is true or false
Ariel is a Canadian citizen who works in Montreal, Canada and owns a winter home in Palm Beach, Florida. When Ariel spends the winters in Palm Beach, an increase in the value of the Canadian dollar relative to the U.S. dollar should
A) hurt Ariel as it is now more expensive to live in Palm Beach since the Canadian dollar appreciation. B) help Ariel as each Canadian dollar of her salary is now worth more U.S. dollars. C) hurt Ariel as each Canadian dollar of her salary is now worth less U.S. dollars. D) help Ariel as it is now less expensive to live in Canada since the Canadian dollar appreciation.