Suppose the demand for roses increases from 500 to 600 stems when income rises from $10,000 to $20,000. Income elasticity for roses is:
A. 0.27.
B. 0.02.
C. 2.
D. 3.6.
Answer: A
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The existence of a monopoly:
A. creates a gain of total surplus. B. benefits the consumer. C. benefits the monopolist. D. creates more consumer surplus.
The most frequently used tool of U.S. monetary policy is
a. the discount rate. b. the reserve requirement. c. open-market operations. d. moral suasion.
When competitive forces in an industry are weak,
a. the absence of competition generally leads to overproduction. b. prices may exceed the amount consumers are willing to pay. c. the operational efficiency of private firms will be enhanced. d. higher prices and less than optimal production may result.
Which of the following examples, ceteris paribus, is most likely to cause a rightward shift in that nation’s long-run aggregate supply curve?
a. The United Kingdom experiences a decline in labor productivity. b. The French government increases government regulations on business. c. The price of oil temporarily declines in the United States. d. The Netherlands experiences an increase in its stock of capital.