The concept of scarcity as used by economists refers to:
a. a situation of excess supply.
b. a situation in which the available resources are not enough to satisfy the wants of the people at a zero price.
c. a situation in which an item is available only in very small quantities.
d. a situation in which an item is very expensive.
e. a situation in which a resource is nonrenewable.
b
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In an economy where nominal incomes adjust equally to changes in the price level, we would expect the long-run aggregate supply curve to be: a. vertical
b. horizontal. c. unit elastic. d. negatively sloped. e. positively sloped.
Exhibit 11-2 Aggregate demand and supply model
Suppose the economy in Exhibit 11-2 is in equilibrium at point E1 and the marginal propensity to consume (MPC) is 0.75. Following Keynesian economics, the federal government can move the economy to full employment at point E2 by:
A. decreasing government tax revenue by approximately $33 billion. B. decreasing government tax revenue by $750 billion. C. increasing government tax revenue by $100 billion. D. increasing government tax revenue by approximately $33 billion.
Behavioral economists believe that people:
A. assess current and future options equally well. B. do not care about fairness, especially if it impairs their ability to get what they want. C. make errors in decision making because of problems such as bad information, but such errors are random and generally not repeated by the same individual. D. often succumb to temptation.
A computer company is considering lowering the price of its laptop computer to promote sales. However, it worries that this will reduce desktop computer sales. It finds the cross product of demand to be 1.5. Are its concerns legitimate? Explain
Please provide the best answer for the statement.