Suppose that a jewelry store found that when it increased prices by 10 percent, sales revenue increased by 3 percent. Which of the following is true about the price elasticity of demand for the store's goods?
A. Demand is perfectly inelastic.
B. Demand is inelastic, but not perfectly.
C. Demand is perfectly elastic
D. Demand is elastic, but not perfectly.
Answer: B
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Using the "It's not fair if the result isn't fair" principle of fairness, an income tax designed to transfer wealth from the rich to the poor
A) increases efficiency and equity. B) increases efficiency and does not affect equity. C) decreases efficiency and increases equity. D) decreases efficiency and equity.
According to Keynes's theory of liquidity preference, velocity increases when
A) income increases. B) wealth increases. C) brokerage commissions increase. D) interest rates increase.
The opportunity cost of going to college is best measured by the
a. cost of room and board b. cost of tuition c. cost of room and board plus tuition d. income forgone by not working, plus tuition e. income forgone by not working, plus tuition and room and board
The total U.S. labor force excludes those
a. under age 20. b. under age 18. c. under age 16. d. over age 70.