If the quantity of bread demanded rises 2 percent when the price of bread declines 10 percent, then the price elasticity of demand is:
A. 0.2.
B. 2.
C. 5.
D. 10.
Answer: A
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What is the difference between inflation and deflation?
A) Inflation is a sustained decrease in the price level whereas deflation is a sustained increase in the price level. B) Inflation is a sustained increase in the price level whereas deflation is a sustained decrease in the price level. C) Inflation is a measure of relative prices whereas deflation is a sustained increase in the price level. D) None of the above.
Refer to the graphs shown, which show indifference curve analysis with the associated demand curves.
The effect of a decrease in the price of X is shown by the movements from:
A. B to C, D to F, or E to G. B. A to B, D to F, or E to G. C. B to C, D to E, or F to G. D. A to B, D to E, or F to G.
Using the Lorenz curve, the degree of income inequality is measured by the:
A. line connecting all points for which a given percentage of families receives exactly that cumulative percentage of income. B. distance of the Lorenz curve from the line of perfect equality. C. flat diagonal line that applies to a perfectly elastic demand curve. D. number of times the Lorenz curve crosses the line of perfect equality.
Which of the following is true of liquidity?
a. Liquidity metrics include assets turnover, price-earnings ratio, and dividend yield.
b. Liquidity is the ability to convert assets to cash.
c. Liquidity is the ability of a company to generate net income related to its invested assets.
d. Liquidity metrics include debt ratio, times interest earned, and ratio of liabilities to stockholders' equity.