Elasticity along a demand curve:
A. changes only when the demand curve is bowed in.
B. changes only when the demand curve is bowed out.
C. is constant if the demand curve is linear.
D. changes when the demand curve is linear.
Answer: D
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Someone who owns stock in a drug company that suddenly and unexpectedly reveals it has found an effective vaccine against AIDS will make a profit on the stock
A) at once. B) only if she hangs on to the stock for a number of years. C) only if she sells the stock. D) only when the dividends actually start to increase. E) when total revenue exceeds all costs, including research and development costs.
A common characteristic of oligopolies is:
a. independent pricing decisions. b. interdependence in pricing decisions. c. few or no plant-level economies of scale. d. low industry concentration.
In the graph showing the Phillips curve after a positive supply shock, we can see that a positive supply shock would cause ______.
a. a leftward shift in the Phillips curve
b. a rightward shift in the Phillips curve
c. a movement to a point further up the Phillips curve
d. a movement to a point further down the Phillips curve
Answer the next question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$450$425$2,000Year 25004503,000Year 36005004,000Year 46406205,000Year 56805804,800Year 66006205,000The budget deficit in year 3 is
A. $3,050 billion. B. $295 billion. C. $175 billion. D. $100 billion.