Which of the following formulas is correct? Percentage change in:
A. real income approximates percentage change in price level minus percentage change in nominal income.
B. nominal income approximates percentage change in price level minus percentage change in real income.
C. price level approximates percentage change in real income minus percentage change in nominal income.
D. real income approximates percentage change in nominal income minus percentage change in price level.
Answer: D
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Claude's Copper Clappers sells clappers for $65 each in a perfectly competitive market. At its present rate of output, Claude's marginal cost is $65, average variable cost is $45, and average total cost is $67 . To maximize his profit or minimize his loss, Claude should
a. increase output b. reduce output but not to zero c. maintain the present rate of output d. shut down e. raise the price
Economic choice and competitive behavior are the result of
a. basic human greed. b. poverty. c. private ownership of resources. d. scarcity.
Answer the following statement true (T) or false (F)
1) After all long-run adjustments have been completed, a firm in a competitive industry will produce that level of output where average total cost is at a minimum. 2) The long-run supply curve for a decreasing-cost industry is downsloping. 3) Marginal cost is a measure of the alternative goods that society forgoes in using resources to produce an additional unit of some specific product. 4) Because the equilibrium position of a purely competitive seller entails an equality of price and marginal costs, competition produces an efficient allocation of economic resources. 5) When entrepreneurs in competitive industries successfully innovate to lower production costs, it usually results in long-run economic profits for the firm.
Draw the demand curve for a good whose price elasticity of demand is equal to zero. Be sure to label both axes. Explain what the graph represents.
What will be an ideal response?