The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier.
B. self-correcting property.
C. short-run equilibrium property.
D. long-run equilibrium property.
Answer: B
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Suppose there are two firms, Boors and Cudweiser, each selling nonalcoholic beer. Suppose Boors and Cudweiser are not viewed as perfect substitutes but rather demand for Boors is QB = 5000 ? 1000PB + 100PC and demand for Cudweiser is QC = 3000 ? 1500PC + 100PB. For simplicity, assume zero marginal costs. Which is the more preferred beer?
a. Boor's b. Cudweiser c. they are equally preferred d. neither are preferred
Other things equal, the demand for a good tends to be more inelastic when
a. there are fewer available substitutes. b. a longer time period is considered. c. the good is considered a luxury good. d. the market for the good is more narrowly defined.
Which of the following statements is most consistent with the benefits-received principle of taxation?
A. A childless couple should not be required to pay taxes for the support of public schools. B. Prosperous corporations should pay substantial taxes even if they use few government goods and services. C. The best tax is the income tax. D. People with high incomes should pay more taxes than people with low incomes.
What is the price elasticity of supply? List and briefly define three cases of the price elasticity of supply
What will be an ideal response?