What does elasticity of demand measure?
(A) The amount of time consumers need to change their demand for a good.
(B) A decrease in the quantity demanded.
(C) An increase in the quantity available.
(D) How buyers will cut back or increase their demand when price rises or falls.
Ans: (D) How buyers will cut back or increase their demand when price rises or falls.
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When the production of a good involves several inputs and inputs are used in fixed proportions, an increase in the cost of one input will usually cause total costs to
A) rise more than in proportion. B) rise less than in proportion. C) remain unchanged. D) rise by the exact amount of the input price increase.
Union contracts with built-in cost-of-living adjustments and home mortgages that vary with the rate of inflation are:
a. inappropriate ways of combating inflation. b. examples of bracket creep. c. means of implementing fiscal policy. d. steps that can be taken to decrease the adverse impacts of inflation. e. examples of failed discarded policies of the 1970s.