In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices.
B. lower prices.
C. lower output.
D. None of these is true.
Answer: D
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Suppose the quantity of x is measured on the horizontal axis. If the income consumption curve is vertical, then the income elasticity of demand for x is
A) 0. B) 1. C) -1. D) There is not enough information to determine the income elasticity of demand for x.
An industry which has a 4-firm concentration ratio near 20 would best be described as
A. oligopoly. B. monopolistic competition. C. perfect competition. D. monopoly.
The practice of lending very small amounts of money, without collateral, and accepting small savings deposits is known as
A. microfinance. B. a stabilization program. C. capital flight. D. debt rescheduling.
Which of the following is not a flow in the circular flow model?
A) the flow of profit and the flow of revenue B) the flow of income earned by households and the flow of expenditures incurred by households C) the flow of revenue received by producers and the flow of payments to resource owners D) the flow of goods and services and the flow of resources to produce goods and services