The concept of price elasticity of supply measures the
A. sensitivity of sellers to price changes.
B. slope of the supply curve.
C. number of sellers in a market.
D. extent to which the supply curve shifts as the result of a price decline.
Answer: A
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The above figure shows a labor market with a minimum wage of $8 an hour. The deadweight loss equals the
A) area abc. B) distance ab. C) distance ad. D) area bad. E) area acd.
The term for the Fed's day-to-day technique for controlling the stock of money is
A) discounting operations. B) interest-rate operations. C) liquidity operations. D) open market operations. E) treasury operations.
If tablets have an absolute price elasticity of 1, the demand for tablets is
A) unit elastic. B) inelastic. C) perfectly elastic. D) elastic.
When central bankers are acting preemptively they are:
A. aggressively trying to hit a zero inflation target. B. usually focused on reducing expansionary gaps. C. letting markets work and taking a wait and see approach. D. taking bold steps to stabilize the economy.