The demand for a pack of gum is ________ than is the demand for a steak because ________.
A. less price elastic; a pack of gum is more of a luxury.
B. less price elastic; a pack of gum requires a smaller portion of one's income.
C. more price elastic; a pack of gum is more of a luxury.
D. more price elastic; a pack of gum requires a smaller portion of one's income.
Answer: B
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Indicate whether the statement is true or false
Which of these is an example of a contractionary fiscal policy?
a. A decrease in the sales tax rate b. An increase in unemployment insurance c. An increase in the excise tax rate d. A decrease in import duty
The median-voter theorem explains why
a. politicians take extreme stands on issues. b. voters are attracted to political outsiders. c. two opposing politicians tend to take opposite sides of each issues. d. politicians tend to take middle-of-the-road positions.
All of the following could be a barrier to entry EXCEPT:
A. decreasing long-run average cost. B. rising LMC. C. patents. D. switching costs. E. a government franchise.