The demand for all carbonated beverages is likely to be ________ the demand for Dr.
Pepper.
A) more elastic than
B) perfectly elastic compared to
C) less elastic than
D) perfectly inelastic compared to
The phrase “demand has decreased” means that
A) a demand curve has shifted to the left.
B) there has been an upward movement along a demand curve.
C) there has been a downward movement along a demand curve.
D) a demand curve has shifted to the right.
Suppose that Congress allocates $5 billion to an “energy-efficient appliance rebate”
program. It also raises taxes by $5 billion to keep the deficit from growing. If the
marginal propensity to consume is 0.8, what is the effect on equilibrium GDP?
A) GDP does not change.
B) GDP increases by $25 billion.
C) GDP increases by $4 billion.
D) GDP increases by $5 billion.
Table 4-6
The equations above describe the demand and supply for Aunt Maud’s Premium Hand
Lotion. What are the equilibrium price and quantity (in thousands) for Aunt Maud’s
Lotion?
A) $20 and 30 thousand
B) $30 and 20 thousand
C) $60 and 30 thousand
D) $20 and 60 thousand
Long-run economic profits would most likely exist in which market structure?
A) monopoly, monopolistic competition and oligopoly
B) monopoly and oligopoly
C) monopoly and monopolistic competition
D) monopoly only
Tesla Motors manufacturers its cars at a plant in Fremont, California. At this plant,
Tesla is able to take advantage of the high level of technical training possessed by its
American workers, but it also sacrifices the ability to pay lower wages had it chosen to
open its plant in a low-wage country such as Mexico, India, or China. In deciding to
open the Fremont plant, Tesla
A) faced no trade-offs because employing more technically-skilled workers increased
efficiency.
B) faced a trade-off between higher cost and lower precision.
C) adopted a negative technological change because it chose high-skilled workers over
low-paid workers.
D) eroded some of its competitiveness in the luxury electric car market because of its
increased cost of production.
In the city of Alvarez, with the exception of guide dogs for blind people, all dogs are
banned from its three public parks, regardless of whether the animals are leashed. Many
residents are pushing for a change in policy. Canine lover Sara Northridge observed,
“There are 800 or more homes here. There are three parks within 10 minutes, and
almost everyone has a dog, but we can’t take our dogs there.” Others fear that allowing
dogs would detract from their enjoyment of the parks. Tim Cortis retorted, “We’re not
preventing dog lovers from enjoying the park, just come without your dog.” Which of
the following is a way of dealing with the problem by assigning property rights to a
particular group?
A) impose a two-tier entry fee system€a lower fee for non dog owners and a higher fee
for dog owners
B) impose a fee only for dog owners to use the public parks; non dog owners do not pay
a fee
C) dedicate some parks, or at least one park, exclusively for the use of visitors bringing
dogs to the park
D) allow dog owners to bring their dogs to the park but insist that they keep watch over
their dogs
The demand curve of a monopolistically competitive firm
A) is horizontal because the firm must cut its price to sell more.
B) is perfectly elastic.
C) is downward sloping because it sells an identical product.
D) is downward sloping because it must cut its price to sell more.
If the consumption function is defined as C = 7,250 + 0.8Y, what is the autonomous
level of consumption expenditure?
A) $5,800
B) $7,250
C) $9,062.50
D) $9,700
Household spending on goods and services is known as
A) consumption spending.
B) planned investment spending.
C) government purchases.
D) net exports.