If the price of a good falls by 10% and the percentage increase in the total amount consumers spend on the good is 5%, then the good is
A. elastic.
B. inelastic.
C. perfectly inelastic.
D. unit elastic.
Answer: A
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Spending on newly constructed homes is part of the investment component of GDP.
Answer the following statement true (T) or false (F)
If the market for Twinkies is in equilibrium, then
A) Twinkies must be a normal good. B) producers would like to sell more at the current price. C) consumers would like to buy more at the current price. D) the quantity supplied equals the quantity demanded.
In the macroeconomic short run
A) actual real GDP may be less than or more than potential GDP. B) the unemployment rate is zero. C) by definition, the economy is always moving away from full employment. D) actual real GDP always equals potential GDP.
Melon Computer Company manufacturers its computer components in Singapore and assembles the computers intended for sale in North America in its plant in Arizona. If the U.S
reduces the corporate income tax rate next year, what is the likely outcome for Melon Computer Company? A) Reduce the transfer price for computer components and increase downstream profits B) Reduce the transfer price for computer components and decrease downstream profits C) Increase the transfer price for computer components and increase downstream profits D) Increase the transfer price for computer components and decrease downstream profits