Which of the following goods is likely to have the most elastic demand?
A. movie passes
B. cigarettes
C. electricity
D. gasoline
Answer: A
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A perfectly competitive firm has a random demand with a 90 percent chance of being $100, a 5 percent chance of $90, and a 5 percent chance of being $80. What is the firm's expected marginal revenue?
A) $96.40 B) $98.50 C) $92.75 D) $90.50
Which of the following creates a positive externality?
a. a paper mill polluting a river b. a stock market crash c. a neighbor that beautifies her lawn d. taxes and subsidies e. the greenhouse effect
In order to convert nominal gross domestic product (GDP) to real gross domestic product (GDP), we must divide: a. real GDP by the price index
b. nominal GDP by the price index. c. the price index by nominal GDP. d. the price index by real GDP. e. nominal GDP by 100.
"The economy can be in equilibrium, with aggregate supply equal to aggregate demand, at a level substantially below the full employment level of output." This statement best describes the views of
A. both the classical economists and the Keynesians. B. neither the classical economists nor the Keynesians. C. the classical economists. D. the Keynesians.