Suppose that when the price rises by 20% for a particular good, the quantity demanded of that good falls by 10%. The price elasticity of demand for this good is equal to 2.0
a. True
b. False
Indicate whether the statement is true or false
False
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Taxes, savings, and imports tend to magnify the effect of any spending change in the economy; that is, if investment spending initially increases, then spending will grow even more as taxes, savings, and imports increase, so the economic growth will
accelerate. Indicate whether the statement is true or false
Refer to Scenario 16.1. Suppose instead that Sam is initially allocated 3 cheese doodles and 3 pretzels, whereas Sally is initially allocated 6 cheese doodles and 10 pretzels. Which of the following statements is TRUE?
A) This allocation is Pareto optimal. B) This allocation is not Pareto optimal as Sally and Sam have unequal amounts of each good. C) The allocation is not Pareto optimal as Sally would be willing to exchange two pretzels for one cheese doodle and be better off, without making Sam worse off. D) The allocation is not Pareto optimal as Sam would willing exchange one pretzel for two cheese doodles and be better off, without making Sally worse off.
Which of the following is subject to double taxation?
A) income earned by people in the lowest tax bracket B) Social Security income C) dividends and retained earnings D) income earned by government employees
If marginal costs are rising
A) total fixed costs are falling B) average fixed costs are constant. C) average fixed costs are rising D) none of these choices.