Which of the following statements correctly characterizes the elasticity of demand for food?
a. While food demand is not very responsive to changes in price, increases in income produce big increases in the demand for food.
b. As income increases, the quantity demanded of food decreases.
c. If the price of food falls by 5 percent, quantity demanded will rise by less than 5 percent.
d. People consume the same amount of food regardless of the price of food.
c. If the price of food falls by 5 percent, quantity demanded will rise by less than 5 percent.
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Arnold Harberger was the first economist to estimate the loss of economic efficiency due to market power. Since Harberger's findings were published, other researchers have studied this same issue. How do the results of these researchers compare to Harberger's results?
A) The other researchers reached conclusions similar to Harberger's; namely, the loss of economic efficiency due to market power is about 1 percent of the value of production in the United States. B) The other researchers reached conclusions different from Harberger's; namely, they found that the loss of economic efficiency due to market power is only about 1 percent of the value of production in the United States, much less than Harberger's estimate. C) The other researchers reached conclusions different from Harberger's; namely, the loss of economic efficiency due to market power is about 10 percent of the value of production in the United States, significantly greater than Harberger's estimate. D) The other researchers reached conclusions similar to Harberger's; namely, the loss of economic efficiency due to market power is about 10 percent of the value of production in the United States.
In 2010, the net national debt was about $9 trillion or approximately $29,000 per person
a. True b. False Indicate whether the statement is true or false
The concept that market forces in the macroeconomy can remedy a recession is referred to as:
a. Keynesianism: the use of expansive fiscal and monetary policies to resolve a recession. b. The self-correcting mechanism c. The consumption function d. The paradox of thrift
According to the principle of rational choice, a consumer should spend money on those goods which provide the most marginal utility per dollar.
Answer the following statement true (T) or false (F)