How is the price-change formula to predict the change in the equilibrium price resulting from a change in demand calculated?
A. by dividing the percentage change in price by the sum of the price elasticities of supply and demand
B. by dividing the percentage change in demand by the sum of the price elasticities of supply and demand
C. by dividing the percentage change in supply by the sum of the price elasticities of supply and demand
D. by dividing the percentage change in income by the sum of the price elasticities of supply and demand
Answer: B
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If short-run equilibrium output equals 20,000 and full employment equals 25,000, then this economy has a(n)
A. employment gap. B. inflationary gap. C. demand gap. D. recessionary gap.
All of the following were took place during the German hyperinflation in the 1920s EXCEPT
A) banks reduced lending. B) some banks only made loans to customers who agreed to repay in terms of foreign currencies or commodities. C) Deutsche Bank had to lay off many workers due to lack of business. D) households and firms increased their demand for loans.
What is the intuition that an expansion of an individual's budget set represents a gain?
A) More options are preferred to less. B) Money is the root of all happiness. C) Information is power. D) Scarcity is avoidable with prosperity.
If the marginal product of labor is 100 and the price of labor is 10, while the marginal product of capital is 200 and the price of capital is $30, then what should the firm?
a. The firm should use relatively more capital b. The firm should use relatively more labor c. The firm should not make any changes – they are currently efficient d. Using the Equimarginal Criterion, we can't determine the firm's efficiency level e. Both c and d