Last year, after Shirley received a 14 percent pay increase, she increased the quantity of pork chops she purchased by 6 percent. Hence, her income elasticity of demand for pork chops equals
A) 0.43.
B) -0.43.
C) 2.33.
D) -2.33
Ques. 2The figure above shows short-run cost curves for a perfectly competitive firm. If the price of the product is 8 and the firm does not shut down, the firm's output in the short run
A) will be 0.
B) will be between 0 and 10.
C) will be 10 or higher.
D) cannot be determined without more information.
Ques. 3What are fiscal and monetary policies? Do they have an immediate effect on the AD curve or the SAS curve?
What will be an ideal response?
Ques. 4Fluctuations in exchange rates, other things remaining the same, creates a situation in which money buys the same amount of goods and services in different currencies.
What does the previous statement describe? Will these fluctuations occur in the short run or the long run?
Ques. 5For a risk-averse individual, as wealth increases, total utility
A) increases at a decreasing rate.
B) increases at a constant rate.
C) increases at an increasing rate.
D) is constant.
Ques. 6The data show that money growth and inflation are
A) positively correlated.
B) negatively correlated.
C) not correlated.
D) independent phenomena.
Ques. 7A country that has an absolute advantage in producing all goods will ________.
A) have a comparative advantage in some goods but not all
B) produce all goods at lowest opportunity cost
C) have a comparative advantage in all goods
D) not gain from specialization and trade
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