An increase in quantity demanded caused no change in the equilibrium price. Thus, demand must be
A. elastic.
B. perfectly elastic.
C. inelastic.
D. perfectly inelastic.
Answer: B
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After the terrorist attacks on September 11, 2001, governments within the United States raised expenditures to increase security at airports. These purchases of goods and services are
a. not included in GDP since they do not represent production. b. not included in GDP since the government collects taxes to pay for them. c. included in GDP since government expenditures on goods and services are included in GDP. d. included in GDP only to the extent that the federal government, rather than state or local governments, paid for them.
A decrease in price causes:
A. a quantity effect, which is an increase in revenue that results from selling fewer units of the good. B. a price effect, which is an increase in revenue that results from receiving a lower price for each unit sold. C. both a price effect and quantity effect. D. a decrease in quantity demanded.
The MU of computers is initially larger than the MC of producing them in a free market. We may expect output of computers to
A. fall, MC to rise, and MU to rise. B. rise, MC to fall, and MU to fall. C. rise, MC to rise, and MU to fall. D. fall, MC to fall, and MU to rise.
Refer to the accompanying table below. The marginal cost of the 3rd unit of this activity is: Units of ActivityTotal CostTotal Benefit0$0$01$30$1002$40$1603$60$1904$100$2105$150$2206$210$225
A. $30 B. $25 C. $10 D. $20