At the midpoint of a straight-line demand curve, the price elasticity of demand is:
A. greater than one.
B. zero.
C. less than one.
D. equal to one.
Answer: D
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A steep IS curve implies that
A) an increase in money supply will change output by a relatively small amount. B) a decrease in taxes will change output by a relatively small amount. C) changes in money supply will have large multiplier effects on output. D) A and B.
Which of the following is not a step involved in cost-benefit analysis?
a. Conversion of the costs and benefits to dollar terms. b. Enumeration of the costs and benefits. c. Enumeration of the special interests. d. Enumeration of the options.
If the elasticity of demand for cigarettes is 0.4, then an increase in the price of a pack of cigarettes from $1.00 to $1.30 would reduce quantities demanded by about
a. 27 percent. b. 40 percent. c. 12 percent. d. 95 percent.
A change in the capital stock ________ the short-run aggregate supply curve and ________ the long-run aggregate supply curve.
What will be an ideal response?