Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C
B. B; C
C. B; A
D. D; B
Answer: D
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The price elasticity of supply tells us:
A. the percentage change in quantity supplied when the price of the good changes by one percent. B. in which direction the quantity supplied changes as we move along the supply curve. C. how quickly the supply will respond to a change in price. D. the magnitude of shift in the supply curve in response to a change in price.
Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Considering both country's production possibilities frontiers, we can conclude that Country B will specialize in:
A. trucks, and be willing to accept no fewer than 3 cars for each truck.
B. cars, and be willing to give no more than 3 cars for each truck.
C. trucks, and be willing to accept no more than 3 cars for each truck.
D. cars, and be willing to give no fewer than 3 cars for each truck.
Franchises with the lowest team revenues in their league
A. usually find it difficult both to win and make money in the same season. B. make it into the playoffs much more often than other teams. C. sign by far the most talented players among the free agents. D. build the largest number of luxury suites due to the intense loyalty of their diehard fans.
Holding all other factors constant, consumers demand more of a good the
A) higher its price. B) lower its price. C) steeper the downward slope of the demand curve. D) steeper the upward slope of the demand curve.