The law of demand is illustrated by a demand curve that is
a. horizontal
b. vertical
c. upward sloping
d. constant
e. downward sloping
E
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Supplier Power Nora's Nicest Knick Knacks has produces a variety of products sold as souvenirs. She started out printing local sayings on tee-shirts, e.g., FDNY, and purchased plain tee-shirts from a single supplier. Since then, she has added coffee
mugs, key chains, souvenirs spoons and many other items. For each of these, she has lined up one or more suppliers. How does the change in the sourcing of her inputs affect how much of the value she creates that she gets to capture?
Suppose you believe that plaid flannel shirts are an inferior good, and want to test this with economic data. You expect to find that the income elasticity for plaid flannel shirts is:
A. greater than zero, but less than one. B. greater than one. C. less than zero. D. close to zero.
Suppose that output in an economy is 1,000 units and the number of hours worked in the economy is 40. What is the value of labor productivity?
A. 1,000 units per worker hour. B. 25 units per worker hour C. 0.04 units per worker hour. D. 125 units per worker hour.
Jan's Dry Cleaning holds $10,000 on a typical day, although only $2,000 is essential for carrying out business. Making a midday deposit is estimated to reduce cash holdings to $8,000 and cost an extra $80 per year in lost production. If, in addition, an armored car service is engaged to pick up cash more frequently for a fee of $120 per year, cash holdings will be further reduced to $6,000 per day. Employing a computerized cash management service for an annual fee of $180 would reduce cash holdings further to $4,000. If any reduction in cash holdings will be used to purchase government bonds earning 5%, then how much money should Jan's hold?
A. $6,000 B. $10,000 C. $8,000 D. $4,000