If a demand curve for a good were completely vertical, it would be considered:
A. perfectly elastic.
B. perfectly inelastic.
C. unitary elastic.
D. relatively inelastic.
Answer: B
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The manager of Slick Lens, a sunglasses manufacturer, notices that the cost to purchase lenses for their sunglasses in the spot market has increased. As a result of the change, which of the following is true?
A) The manager has more of an incentive to integrate backward. B) The manager has less of an incentive to integrate backward. C) The manager has more of an incentive to integrate forward. D) The manager has less of an incentive to integrate forward.
Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
When the price of holiday lights increases 4 percent, the quantity supplied increases 3 percent. This example would have a(n) ______ supply curve.
a. equilibrium b. unit c. elastic d. inelastic
One problem with constructing a perfectly complete realistic economic model is that
A) it would be too simplistic to have any value. B) it would be far too complicated to analyze. C) it would not serve the needs of economists who builds that model. D) None of the above is true.