1. The price elasticity of demand reflects the responsiveness of

a. firms to changes in demand.

b. demand to a change in price of a substitute good.

c. demand to a change in price.

d. quantity demanded to a change in price.

2. "As output increases, average fixed costs:"

a. decrease

b. initially decrease then increase.

c. remain constant

d. increase

3. Economist define a recession as when GDP declines by:

a. 2 months in a row

b. 3 quarters in a row

c. 2 years in a row

d. 2 quarters in a row

4. The most common measure of an economy s standard of living is:

a. median family income

b. per capita GDP

c. per capita income

d. average household income

5. Which of the following items would be counted in GDP?

a. The work of a stay at home dad

b. The sale of a used car

c. The soda you buy at a movie theater

d. The flowers you personally grow and cut from your own garden to display in your home