The demand for a luxury good whose purchase would exhaust a big portion of one's income is
A. relatively elastic.
B. relatively inelastic.
C. perfectly elastic.
D. unit-elastic.
Answer: A
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If the elasticity of demand coefficient for a good is one-sixth (in absolute terms), we know:
a. that for every 1% increase in quantity, there will be a 6% increase in price. b. that for every 1% increase in quantity, there will be a 6% decrease in price. c. that for every 6% increase in quantity, there will be a 1% increase in price. d. that for every 6% increase in quantity, there will be a 1% decrease in price.
The largest income component in the national income accounts is
A. wages. B. rents. C. corporate profits. D. interest.
Stagflation occurs when the economy experiences:
A. low unemployment and low inflation. B. high unemployment and rapid inflation. C. low unemployment and rapid inflation. D. high unemployment and low inflation.
Tobin's q is equal to
A. the expected after-tax real interest rate. B. the ratio of capital's market value to its replacement cost. C. the stock market value of a firm. D. the ratio of capital's replacement cost to its market value.