Suppose that the percentage change in demand is 10%, the price elasticity of demand is 1, and the percentage change in the equilibrium price is 3.33%. What is the price elasticity of supply?
A. 0
B. 1
C. 2
D. 3
Answer: C
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Suppose a new study highlights the health benefits of eating bacon. At the same time, suppose the cost of producing bacon falls. Given these changes, you should expect to see:
A. an increase in both the equilibrium price and quantity of bacon. B. an increase in the equilibrium price of bacon, but it's hard to say what will happen to the equilibrium quantity. C. an increase in the equilibrium quantity of bacon, but it's hard to say what will happen to the equilibrium price. D. a decrease in the equilibrium price of bacon, but it's hard to say what will happen to the equilibrium quantity.
Refer to the graph shown. If the price level is P1 the:
A. aggregate demand curve will shift to the left in the long run to restore equilibrium. B. short-run aggregate supply curve will shift up (to the left) in the long run to restore equilibrium. C. short-run aggregate supply curve will shift down (to the right) in the long run to restore equilibrium. D. aggregate demand curve will shift to the right in the long run to restore equilibrium.
At the point where the demand and supply curves for a product intersect,
What will be an ideal response?
One of the most important forms of capital income is
A. wages. B. profits. C. rent. D. depreciation.