What is a recession?

(A) A very mild and short expansion.
(B) A period when the economy is neither expanding nor contracting.
(C) A period when real GDP falls for at least six months.
(D) A long and severe depression.

Ans: (C) A period when real GDP falls for at least six months.

Economics

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The figure above shows a production possibilities frontier. In the figure, which of the following combinations of the two goods are efficient?

A) 4 million cell phones and 4 million DVDs B) 2 million cell phones and 13 million DVDs C) 5 million cell phones and 15 million DVDs D) no cell phones and 15 million DVDs E) None of these combinations is efficient.

Economics

You observed last week that the price of organic tomatoes in Ames was $4 per pound and that the total quantity of organic tomatoes consumed in Ames was 50 pounds. This week, you observe the price of organic tomatoes increased to $5 per pound and consumption decreased to 30 pounds. What is the elasticity of demand for organic tomatoes?

A. -2 B. -1.6 C. -1 D. -0.625

Economics