Ray's company just announced that everyone will be getting their pay cut by 5% in order to avoid having to close down. Ray's demand for coffee, a normal good, will likely:
A. decrease, and his demand curve will shift to the left.
B. increase, and his demand curve will shift to the right.
C. increase, and his demand curve will shift to the left.
D. decrease, and his demand curve will shift to the right.
Answer: A
Economics
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Suppose a 20 percent increase in the price of gasoline results in a 25 percent increase in the quantity supplied. This response means that gasoline has
A) an elastic supply. B) an inelastic supply. C) a unit elastic supply. D) an inelastic demand. E) an elastic demand.
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If nominal GDP in 2001 is $9 trillion, and 2001 real GDP in 1996 prices is $6 trillion, the GDP deflator price index is
A) 7. B) 100. C) 150. D) 200.
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