Refer to the above table. What is the absolute price elasticity of demand if a price falls from $7 to $6.50?
A. 0.85
B. 0.92
C. 1.17
D. 1.08
Answer: C
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During an inflationary gap,
A) the aggregate demand curve and the aggregate supply curve intersect at a level of real GDP that exceeds potential GDP. B) the aggregate demand curve and the aggregate supply curve intersect at potential GDP. C) the aggregate demand curve and the aggregate supply curve do not intersect. D) real GDP is less than potential GDP. E) the price level will fall to restore the long-run equilibrium.
The fact that a rock star earns $5 million a year while a teacher earns $25,000 annually is most directly an example of an economy answering the ________ part of one of the two big economic questions
A) "when" B) "for whom" C) "how" D) "why"
What is a firm's minimum efficient scale?
What will be an ideal response?
If price is above average total costs, the firm
A) is earning positive profits. B) is earning negative profits. C) is making a normal rate of return on its capital investment. D) may be earning a positive or negative profit depending upon costs.