Which of the following events would likely cause the largest reduction in current consumption?
A) a permanent reduction in annual salary of $2000
B) a one-time tax increase of $4000
C) a one-time reduction in income (e.g. a bonus) of $4000
D) both B and C
A
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C B. Falling; A; C C. Falling; A; B D. Rising; A; C
Torrie is thinking of starting up a small business selling hand-painted wine glasses. She is considering setting up her business as a sole proprietorship. What is one advantage to Torrie of setting up her business as a sole proprietorship?
A) As a sole proprietor, Torrie would have the ability to share risk with shareholders. B) As a sole proprietor, Torrie would face limited liability. C) As a sole proprietor, Torrie would have both ownership and control over the business. D) All of the above would be advantages of setting up her business as a sole proprietorship.
The percentage change in the quantity demanded of film divided by the percentage change in the price of cameras indicates:
a. the price elasticity of demand for film. b. the price elasticity of demand for cameras. c. the price elasticity of supply for film. d. the price elasticity of supply for cameras. e. nothing, because the two goods fall into the broadly defined category of photographic equipment.
As a society produces more and more of one good, it must give up increasing amounts of the alternative good. This demonstrates the
a. law of demand b. convexity of the production possibilities frontier c. law of increasing opportunity cost d. principle of productive inefficiency e. effects of shifts in the level of technology