The Gini coefficient for Algeria is about 0.4. How would this number be shown on a Lorenz curve?
A. The length of the Lorenz curve is 40 percent longer than the line of equality.
B. It cannot be shown; the Lorenz curve and the Gini coefficient are alternative ways of measuring inequality.
C. The area between the Lorenz curve and the line of absolute equality is 40 percent of the total area under the line of equality.
D. The area between the Lorenz curve and the x-axis is 40 percent of the total area below the line of equality.
Answer: C
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The historical record for the United States for the past 100 years shows
A) growth in real GDP per person during most years. B) economic growth for about half the years and economic decline for the other half. C) growth until 1970 and then a period of constant per person real GDP. D) continuous economic growth, although at different rates, throughout the entire century.
Suppose the price elasticity of demand for cigarettes is -0.4. The FDA decides to regulate tobacco production, which increases the price of cigarettes and causes the quantity of cigarettes demanded to decrease by 25 percent
What is the percentage increase in price which would lead to the 25 percent decrease in quantity demanded? If the price elasticity was -4, what would be the percentage increase in price?
Which of the following would most likely happen in the short run if P dropped slightly below the dotted line?
a. The firm would shut down.
b. The firm would exit the market.
c. The firm would stay open.
d. The firm would expand.
When quantity demanded equals quantity supplied,
A. there must be no government intervention in the market. B. the market is in equilibrium. C. the demand curve must be the same as the supply curve. D. all of the above