The short-run price elasticity of demand for airline travel is .05, while the long-run elasticity is 2.36 . This means that a significant increase in airline ticket prices will cause airline companies to:
a. collect less revenue from short-notice travelers.
b. collect more revenue from travelers who book well in advance.
c. lose money on short-notice travelers.
d. collect less revenue from travelers who book well in advance.
e. lose many of its short-notice travelers.
d
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Answer the next question using data in the following tables showing production possibilities for units of food and clothing for two regions, East and West, of a hypothetical world.East Production PossibilitiesWest Production Possibilities ABCD ABCDFood241680Food4530150Clothing04812Clothing051015The mutually beneficial terms of trade will be
A. between 2 and 3 units of food for 1 unit of clothing. B. less than 2 units of food for 1 unit of clothing. C. greater than 4 units of food for 1 unit of clothing. D. between 4 and 5 units of food for 1 unit of clothing.
Why is persistent unemployment a possibility in the Keynesian model but NOT in the classical model?
A) The Keynesian model assumes that people work for motives other than those of earning an income for themselves and supporting a family. B) The Keynesian model assumes that workers can lose their jobs to foreign competition during economic downturns. C) The Keynesian model assumes that the level of real GDP is inflexible. D) The Keynesian model assumes that nominal wages are inflexible downward.
In a model with money neutrality, how much should the money supply be increased to obtain a 1% increase in nominal output?
A) -1% B) between 0 and 1% C) 1% D) It cannot be done.
In the United States, people that have few resources that are valued in the market due to either disability, discrimination, or poor health receive short-term public assistance. Specifically, the government gives some households ____________ .
Fill in the blank(s) with the appropriate word(s).