If the price of grapes increases, total expenditures on grapes will decline if
a. there are few substitutes for grapes.
b. the supply of grapes is inelastic.
c. the demand for grapes is elastic.
d. grapes are a normal good.
C
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A country has a comparative advantage over another in the production of gadgets if it can produce
a. more gadgets than can the other country. b. more gadgets than can any other country. c. gadgets more efficiently than it can produce any other good. d. gadgets at lower opportunity cost than can the other country.
The economy is in a recessionary gap and a Keynesian economist advocates expansionary fiscal policy. What is a likely reason this economist advocates expansionary fiscal policy?
A) The economist believes the economy is stuck in a recessionary gap and crowding out will be complete. B) The economist believes the economy is stuck in a recessionary gap and there will be no crowding out. C) The economist believes that wages are too flexible and that crowding out will be incomplete. D) The economist believes the AD curve is downward-sloping, the SRAS curve is upward-sloping, and prices are flexible. E) none of the above