Quiz - Quiz#2TakehomeDueOctober4,2011 1. If the price of a...

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Quiz #2   -   Takehome  -   Due October 4, 2011   1. If the price of a gallon of gasoline was 28 cents in 1965 and 32 cents in 1969, then the: A. nominal price increased, but we can’t tell the real price unless we know what happened to the prices of other goods B. nominal price increased but the real price decreased C. absolute price increased but the real price decreased D. absolute and relative price increased 2. In constructing a production possibility frontier: A. resources are assumed to be fixed B. the endpoints of the frontier are determined by the goals set by the rational actor C. sunk costs are measured along the frontier D. the frontier reflects an ideal that is theoretically unattainable 3. One reason for the popularity of rent control laws by renters is that: A. all renters always benefit by rent control laws B. the short-run effects tend to benefit renters, while the long-run effects tend to be ignored C. the short-run effects tend to be negative, but renters know the long-run effects are positive D. the short-run effects benefit renters and the long-run effects benefit landlords, and renters see this as equitable 4. Some goods are not closely related to each other and are neither substitutes nor complements. For such goods, the cross-price elasticity of demand would be: A. positive B. negative C. zero D. Cannot tell without more information 5. If the own-price elasticity of demand is 0.5, then a 10 percent increase in price will:
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A. increase quantity demanded by 5 percent
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Quiz - Quiz#2TakehomeDueOctober4,2011 1. If the price of a...

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