If two foods are perfect substitutes, the cross elasticity between them is
a. zero
b. negative
c. between zero and one
d. infinite
e. there is no specific cross elasticity for perfect substitutes
D
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As compared to the market clearing price, the total amount of consumer surplus and producer surplus is
A) greater for a government-imposed price floor that is higher than that market clearing price. B) greater for a government-imposed price ceiling that is lower than that market clearing price. C) the same as a government-imposed price floor that is higher than that market clearing price. D) smaller for a government-imposed price ceiling that is lower than that market clearing price.
An excess supply of money in the economy implies an excess demand for
a. stocks b. mortgages c. consumer nondurables d. consumer durables e. bonds
Suppose the economy is initially in long-run equilibrium and then it experiences a supply shock in the form of sharply higher energy prices. Which of the following is true?
a. The short-run aggregate supply curve shifts leftward and the long-run supply curve shifts rightward. b. The short-run aggregate supply curve shifts rightward and there is a movement along the aggregate demand curve. c. The short-run aggregate supply curve does not shift and the long-run aggregate supply curve shifts rightward. d. The short-run aggregate supply curve shifts rightward but the long-run aggregate supply curve does not shift. e. The short-run aggregate supply curve shifts leftward and there is a movement along the aggregate demand curve.
Consumption bundles that lie above the boundary established by the budget line:
A. are affordable for the consumer. B. are preferred by the consumer but are not affordable. C. are not preferred by the consumer. D. do not exhaust the consumer's income.