Transactions costs are:
A. often cited as a reason why purchasing power parity doesn't hold.
B. the time and energy involved with creating an exchange.
C. usually higher when transactions take place internationally.
D. All of these statements are true.
Answer: D
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The price elasticity of demand is typically expressed as a positive number because:
A. the demand curve has a positive slope. B. both the numerator and the denominator are negative, so the formula yields a positive number. C. price and quantity move in the same direction. D. it's convenient to use absolute values.
Using the above figure, which of the lines in the above diagram represents a regressive tax?
A) A B) B C) C D) none of them
In Figure 10-5 above, suppose that the level of government expenditures increases. This causes a movement of the steady-state point such as from points
A) A to B. B) D to B. C) D to C. D) A to C. E) A to D.
Which of the Ten Principles of Economics does welfare economics explain more fully?
a. The cost of something is what you give up to get it. b. Rational people think at the margin. c. Markets are usually a good way to organize economic activity. d. People respond to incentives.