The estimated price elasticities of demand for the products listed in the table as "Product A" are from Table 6-2 in the text
Indicate whether the products listed as "Product B" will have a more elastic or less elastic demand than the corresponding Product A.
Product A Estimated Elasticity for Product A Product B Is Estimated Elasticity for Product B More Elastic or Less Elastic than for Product A?
Beer -0.29 Samuel Adams Boston Lager
Chicken -0.37 Organically raised chicken
Cocaine -0.28 Illegal narcotics
Cigarettes -0.25 Marlboro Lights
Restaurant meals -0.67 Denny's Grand Slam breakfast
Product A Estimated Elasticity for Product A Product B Is Estimated Elasticity for Product B More Elastic or Less Elastic than for Product A?
Beer -0.29 Samuel Adams Boston Lager More elastic
Chicken -0.37 Organically raised chicken More elastic
Cocaine -0.28 Illegal narcotics Less elastic
Cigarettes -0.25 Marlboro Lights More elastic
Restaurant meals -0.67 Denny's Grand Slam breakfast More elastic
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Refer to Table 13-2. What is likely to happen to the product's price in the long run?
A) It will fall. B) It will remain constant. C) It will increase. D) This cannot be determined without information on its long-run demand curve.
During the 1970s, countercyclical fiscal policy
a. to spur increases in real GDP failed b. worked better than predicted, curbing inflation while decreasing unemployment rates c. demonstrated that the economy could be fine-tuned using aggressive fiscal policy d. showed that the Keynesian assumption about the shape of the aggregate supply curve was basically correct e. failed to lower the unemployment rate and actually increased the inflation rate