A simple linear demand function may be stated as Q = a - bP + cI where Q is quantity demanded, P is the product price, and I is consumer income. To compute an appropriate value for b, we can use observed values for Q and P and then set -b(P/Q) equal to the:
A. cross-price elasticity of demand.
B. price elasticity of supply.
C. income elasticity of demand.
D. price elasticity of demand.
D. price elasticity of demand.
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If the government has a budget deficit, crowding out might occur. Crowding out leads to all of the following EXCEPT
A) a higher real interest rate. B) a decreased quantity of investment. C) a smaller capital stock in the future. D) decreased private saving.
Using Figure 11.1, which fiscal policy action would increase aggregate demand from AD1 to AD3?
A. A decrease in government spending. B. A decrease in government spending matched by an equal decrease in taxes. C. A decrease in transfer payments. D. A decrease in taxes.
Using real GDP to compare the level of economic well-being in two countries may be misleading because the value of ________ contributes to economic well-being, but is excluded from real GDP.
A. services B. formal education C. leisure D. capital goods
A research project is conducted by offering a randomly selected 300 of the 500 local Toyota Prius owners a chance to use a new fuel additive for 6 months to see if their gas mileage improves. 225 of the 300 randomly selected Prius owners agree to the offer, 50 of those drop out of the project after 1 month, another 50 drop out after 2 months, and 25 more drop out after 3 months. The rest remain for the duration of the project. Using the intention to treat method, the results from how many of the Prius owners who were not selected to be a part of the project should be included in the research project?
A. 100 B. 200 C. 325 D. 400