What does unitary elastic demand mean?
What will be an ideal response?
Answer: The percentage change in quantity demanded is exactly equal to the percentage change in price.
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In Figure 3-2, at point B
A. it is impossible to increase production of consumer goods. B. it is impossible to increase production of capital goods. C. it is possible to increase production of both capital goods and consumer goods simultaneously. D. it is impossible to increase production of both capital goods and consumer goods simultaneously.
If, as a person consumes more and more of a good, each additional unit adds less satisfaction than the previous unit consumed, we are seeing the workings of
A) the law of increasing marginal opportunity cost. B) the law of demand. C) the law of supply. D) the law of diminishing marginal utility.
The current account surplus
A) is a decreasing function of disposable income and an increasing function of the real exchange rate. B) is an increasing function of disposable income and an increasing function of the real exchange rate. C) is an increasing function of disposable income and a decreasing function of the real exchange rate. D) is a decreasing function of disposable income and a decreasing function of the real exchange rate. E) is an increasing function of disposable income and a decreasing function of aggregate demand.
Using a Paasche index to calculate the Consumer Price Index (CPI)
A) weights quantities with current prices. B) weights prices with base-year quantities. C) weights quantities with base-year prices. D) weights prices with current year quantities.