If the elasticity of demand for a service is 1, then the demand for that service is
A. perfectly elastic.
B. elastic.
C. unit elastic.
D. inelastic.
C. unit elastic.
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A policy that increases saving
a. will worsen economic growth, but improve health outcomes. b. will worsen economic growth and health outcomes. c. will improve economic growth, but worsen health outcomes. d. will improve economic growth and health outcomes.
An economic expansion caused by a shift in aggregate demand remedies itself over time as the expected price level
a. falls, shifting aggregate demand right. b. rises, shifting aggregate demand left. c. falls, shifting aggregate supply right. d. rises, shifting aggregate supply left.
A government currently uses price controls to hold down the price of zinc, an exhaustible resource. If price controls are removed,
A. production of zinc will probably fall. B. zinc mines with high marginal cost of production will probably stop producing. C. consumers of zinc will probably want substitutes for zinc. D. income will probably be redistributed from zinc producers to zinc consumers.
Returns to scale is a concept that operates
A) only in the short run. B) only in the long run. C) in both the long run and the short run. D) in either the long run or the short run, but never both.