Because most people spend a very small fraction of the income on tap water, it is likely to be
A. inelastic.
B. perfectly elastic.
C. perfectly inelastic.
D. elastic.
Answer: A
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Policymakers utilize gross domestic product figures
a. to monitor recessions and expansions. b. as a means to measure welfare. c. to observe long-run growth trends. d. Both a and c e. All of the above
Suppose Cathy and Lewis work in a bakery making pies and cakes. Suppose it takes Cathy 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Lewis 2 hours to make a pie and 1.5 hours to make a cake. Which of the following statements is correct?
A. There are no gains from specialization and trade. B. Cathy should specialize in both pies and cakes. C. Cathy should specialize in pies, and Lewis should specialize in cakes. D. Lewis should specialize in pies, and Cathy should specialize in cakes.
Which of the following would tend to increase the quantity of innovative activities?
A. A decline in the rate of return on investment in research and development. B. Dispersing innovative activity away from clusters, where ideas often stagnate. C. A change in government policy that makes patents more difficult to obtain. D. An increase in the rate of immigration of scientists and engineers.
Which movement between two points represents economic growth?
A. J to K
B. K to L
C. L to M
D. M to N