If the price elasticity of demand is 1.3, demand is:
A. upward sloping.
B. inelastic.
C. unit elastic.
D. elastic.
Answer: D
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If the government could raise taxes on one good, which product should the government increase tax rates in order to raise tax revenue?
a. Cigarettes b. Alcohol c. Sodas d. None of the above
Focusing on one activity that we do well and relying on others to produce most of the goods and services we want is an application of the concept of ______.
a. externality b. specialization c. unemployment d. productivity
Future generations are most likely to lose as a consequence of budget deficits if
A. growth of the national debt causes high interest rates that discourage private capital accumulation. B. internally held national debt rises as a percentage of GDP. C. the national debt is continually rolled over, and is never paid off. D. foreigners buy more and more of our national debt, forever.
Along the same indifference curve, MRS is ________ as more of one good is obtained.
A. decreasing B. constant C. increasing D. varying irregularly