If the demand for gasoline becomes more elastic over time,
A. the demand curve will shift out.
B. the demand curve will become flatter.
C. other things being equal, the equilibrium price of gasoline must fall.
D. other things being equal, the equilibrium quantity of gasoline must fall.
Answer: B
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Refer to Figure 28-2. Suppose the Fed used expansionary policy to push short-run equilibrium to point B. If the short-run equilibrium remained at point B long enough
A) the short-run Phillips curve would shift down. B) the short-run Phillips curve would shift up. C) the economy would stay at point B in the long run. D) the economy would move back to point A.
Keynes's theory of the demand for money implies that velocity is
A) not constant but fluctuates with movements in interest rates. B) not constant but fluctuates with movements in the price level. C) not constant but fluctuates with movements in the time of year. D) a constant.
Refer to the above figure. Which diagram shows the effect on the market of Corn Flakes when the demand for Corn Flakes has increased?
A) graph C B) graph D C) neither graph D) both graphs
The individual firm operating in a perfectly competitive labor market
A) can hire more labor only by offering a higher wage. B) faces an inelastic demand for labor. C) will pay less to the additional labor employed. D) can buy all the labor it wants at the going market wage rate.