If consumers completely cease purchasing a product when its price increases by any amount, then demand is:
A. unit elastic.
B. perfectly inelastic.
C. perfectly elastic.
D. inelastic.
Answer: C
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Suppose the price of a quart of milk rises from $1.00 to $1.20 and the price of a T-shirt rises from $8.00 to $9.60 . If the CPI rises from 150 to 195, then people likely will buy
a. more milk and more T-shirts. b. more milk and fewer T-shirts. c. less milk and more T-shirts. d. less milk and fewer T-shirts.
If household saving decreases by $4 million, business saving increases by $4 million, and the government budget deficit decreases by $4 million, then private saving ________ and public saving ________.
A. increases; decreases B. does not change; increases C. does not change; decreases D. increases; increases
Refer to the following graph.
The maximum amount of good B can be consumed in this economy with international trade is
A. Q units. B. F units. C. P units. D. G units.