If the market for bottled spring water is characterized by a very elastic supply curve and a very inelastic demand curve, an outward shift in the supply curve would be reflected primarily in the form of:

Which of the following is NOT an implication of the theory of purchasing power parity?

A) Exchange rates move to equalize the purchasing power of different currencies. B) Exchange rates should be at a level that makes it possible to buy the same amount of goods and services with the equivalent amount of any country's currency in the long run. C) A country with a higher inflation rate should experience an appreciation of its currency. D) The real exchange rate should equal one.

An owner of local salon realized that by decreasing the prices for haircuts, his revenue increased. This implies that

a. The demand for haircuts is elastic b. The demand for haircuts is inelastic c. The demand for haircuts is unitary elastic d. The demand for haircuts is perfectly elastic