Advertising claiming superior quality of a product makes its demand
a. More elastic
b. Less elastic
c. Perfectly elastic
d. None of the above
b
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A 10 percent increase in price leads to a 20 percent decrease in the quantity demanded. The price elasticity of demand is equal to
A) 0.5. B) 1.0. C) 2.0. D) 20.0. E) 10.0.
The bowed-outward shape of a PPF
A) is due to capital accumulation. B) reflects the unequal application of technology in production. C) illustrates the fact that no opportunity cost is incurred for increasing the production of the good measured on the horizontal axis but it is incurred to increase production of the good measured along the vertical axis. D) is due to the existence of increasing opportunity cost.
The monetary growth rule is a plan for increasing the quantity of money
A) at a rate which increases as the economy grows. B) at a rate which decreases as the economy declines. C) at a rate which increases during recessions and decreases during expansions. D) at a fixed rate that does not respond to changes in the economic condition.
Economists believe that countries recently suffering hyperinflation have experienced
A) reduced growth. B) increased growth. C) reduced prices. D) lower interest rates.