In some markets consumers may buy many different brands of a product. Which of the statements below best represents a situation where demand for a particular brand would be very elastic?
A. "The different brands are almost identical. I always buy the cheapest"
B. "I use so little of that product that when I do buy it, I don't pay much attention to the price"
C. "The brand I buy is so superior to other available brands that I hardly consider the others"
D. "I pinch pennies in buying other products, but like most people I feel I owe it to myself to get the best brand of this product"
A. "The different brands are almost identical. I always buy the cheapest"
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The Keynesian portion of the short-run aggregate supply (SRAS) curve implies
A) a downward slope. B) no price level changes. C) flexible prices and wages. D) an upward slope.
Complete Milton Friedman's famous statement, "Inflation is always and everywhere a ________ phenomenon."
A) recessionary B) discretionary C) repressionary D) monetary
Which of the following statements is an example of positive economic analysis?
A) The inflation rate is too high. B) The government should worry less about inflation and more about unemployment. C) If the government increases the rate of growth of the money supply, the inflation rate will increase, ceteris paribus. D) The elderly live on a fixed income, so the government has an obligation to keep inflation rates low.
When economists use the term Ceteris paribus, they are indicating that:
A. the relationship between two economic variables cannot be determined. B. the analysis is true for the individual but not for the economy as a whole. C. all other variables except the ones specified are assumed to be constant. D. their conclusions are based on normative economics rather than positive economic analysis.