Refer to Figure 2-5. If the economy is currently producing at point X, what is the opportunity cost of moving to point W?
A) 5 million tons of paper B) 3 million tons of steel
C) 9 million tons of paper D) 19 million tons of steel
B
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The facts show that the political business cycle theory
A) does a good job of explaining monetary policy during presidential election years. B) is unable to explain monetary policy during presidential election years. C) doesn't generally support the political business cycle theory. D) explains monetary policy best during years in which the President is running for reelection.
Answer the following statements true (T) or false (F)
1. If the percentage change in quantity demanded is less than the percentage change in price, then demand is said to be elastic. 2. A good with a price-elasticity coefficient of 0.75 has a demand that is price-inelastic. 3. If the quantity demanded for good A increases from 40 to 60 when price decreases from $9 to $7, price elasticity of demand in this price range is 1.6. 4. In the price range where demand is elastic, if the seller of the good raises its price, then total revenues will increase. 5. If the price-elasticity coefficient for a product is 0.68 and the seller wants to raise revenues by changing its price, then the seller should cut the price of the product.