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In Exhibit 3-11, in Panel A the movement from point A to point C describes a(n):
A. ambiguous change in price and a decrease in quantity.
B. increase in price and an ambiguous change in quantity.
C. increase in both price and quantity.
D. decrease in both price and quantity.
Answer: D
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The Lucas Wedge shows
A) the negative impact inflation has on consumer spending. B) whether a country needs to slow its real GDP growth rate. C) the positive impact lower taxes have on real GDP. D) the negative impact a slowdown in real GDP growth has on potential GDP. E) the increased impact of government spending on real GDP.
The above figure shows the demand curve for movie rentals from Redbox. At which of the following prices is the demand unit elastic?
A) $5.00 B) $3.50 C) $2.50 D) $0.00
According to Baumol, Blinder, and Solow, recognition of the usefulness of markets
A. labels a person as an apologist (defender) of capital. B. extends to some socialist countries, for example, China. C. should make totally free markets good for any society. D. makes one a radical.
If, after careful analysis, an economist concludes that there has been a market failure, which of the following possible corrective actions might the economist favor? Why? a. prohibiting the activity b. charging fees for continuing the activity c. requiring that the public be informed of the activity d. government purchase of the item for the public
What will be an ideal response?