The midpoint method for calculating elasticities is convenient in that it allows us to
a. ignore the percentage change in quantity demanded and instead focus entirely on the percentage change in price.
b. calculate the same value for the elasticity, regardless of whether the price increases or decreases.
c. assume that sellers' total revenue stays constant when the price changes.
d. restrict all elasticity values to between 0 and 1.
b
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Consumers most likely decide on their current consumption spending by looking at their short-run income prospects.
Answer the following statement true (T) or false (F)
The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
Successful price discrimination cannot take place if
A) customers are not able to resell the product. B) the market is perfectly competitive. C) the demand curve facing the firm is downward sloping. D) the market can be segmented into different buyer groups.
Believers in the hypothesis of rational expectations argue that: a. expansionary fiscal and monetary policy can reduce unemployment without creating inflation. b. a trade-off exists between unemployment and inflation even in the long run
c. the Phillips curve is vertical even in the short run for expected changes in inflation. d. the Phillips curve is downward sloping even in the long run.