If the income elasticity of demand of houses is exactly 1.40 . Due to a recession, you expect incomes to drop by 25% next year. How will consumers adjust their purchase for houses?
a. Buy 35% more houses
b. Buy 35% less houses
c. Buy 25% more houses
d. Buy 25% less houses
b
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The ________ often workers get paid, other things constant, the lower their average money balances, so the ________ active the money supply and the greater its velocity
a. less; less b. more; less c. less; more d. more; more
The shift of the budget line from cd to ab in the above figure is consistent with:
A) decreases in the prices of both M and N . B) an increase in the price of M and a decrease in the price of N . C) a decrease in money income. D) an increase in money income.
If the marginal cost curve of all identical firms in a perfectly competitive industry are horizontal at the same per-unit cost, then the market's consumer surplus equals the area
A. below the marginal cost curve. B. above the demand curve. C. under the demand curve and above the marginal cost curve. D. above the demand curve and beneath the marginal cost curve.
In which price range of the accompanying demand schedule is demand elastic?
A. $4-$3.
B. $3-$2.
C. $2-$1.
D. Below $1.