Chuck Grim has a price elasticity of demand for beer of 1.2. Suppose that the price of beer is increased by 10 percent. What will happen to the total amount Chuck spends on beer?
A. It will not change
B. It will decrease
C. It will increase
D. It is impossible to tell
B. It will decrease
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Explain why the long-run aggregate supply curve is vertical
What will be an ideal response?
A point on the demand curve shows the
A) minimum price that people are willing to pay for another unit of a good. B) dollars' worth of other goods that people must sacrifice to consume another unit of the good. C) maximum price that people are willing to pay for another unit of a good. D) consumer surplus a person gains from consuming a unit of a good. E) marginal benefit minus the consumer surplus from consuming another unit of a good.
Economic profit equals accounting profit minus
A) explicit costs. B) implicit costs. C) fixed costs. D) variable costs.
When current economic conditions are bad, people are ____________ inclined to save, and when they predict bad future economic conditions they are ____________ inclined to save now.
A. less; more B. less; less C. more; more D. more; less