An economist estimates that 0.67 is the price elasticity of demand for disposable diapers. This suggests that disposable diaper producers could
a. advertise more to raise the price elasticity of demand
b. encourage more parents to use cloth diapers
c. lower the price of disposable diapers to raise more revenue
d. raise the price of disposable diapers to raise more revenue
e. increase revenue by lowering price elasticity of demand
D
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Foreign direct investment is
A) the purchase of less than 10 percent of the shares of ownership in a company in another country. B) the purchase of more than 10 percent of the shares of ownership in a company in another country. C) the diversification of purchasing shares in many companies in one country so that risk is kept to a minimum. D) the diversification of purchasing shares in one company in many countries so that risk is kept to a minimum.
If a firm is experiencing diminishing marginal returns to labor,
a. the additional increments to output become smaller as more labor is used b. total output falls as more labor is used c. total output remains constant as more labor is used d. additional increments to output rise as more labor is used e. total revenue falls as more labor is used
Which of the following statements about modern macroeconomic theory is most accurate?
a. Keynes' ideas help us understand movements in output around its long-run trend, while the Classical model is more useful in explaining the long-run trend itself. b. The classical model helps us understand movements in output around its long-run trend, while the short-run macro model is more useful in explaining the long-run trend itself. c. Both classical and short-run macro models help us understand movements in output around its long-run trend, but neither model is effective at explaining the long-run trend itself. d. Neither the classical nor the short-run macro model helps us understand movements in output around its long-run trend, but both are useful in explaining the long-run trend itself. e. Only the short-run macro model is useful in understanding movements in output around its long-run trend, and in explaining the long-run trend itself.
The major difference between nominal GDP and real GDP is that
A. real GDP is the absolute value of goods and services and nominal GDP is a relative value. B. real GDP refers to products made in the United States and nominal GDP refers to both exports and imports. C. nominal GDP is the market value and real GDP has been adjusted for inflation. D. real GDP is a relative value and nominal GDP is an absolute value.