A decrease in supply is graphically represented as a
A) rightward shift of the supply curve.
B) leftward shift of the supply curve.
C) movement up and to the right on a supply curve.
D) movement down and to the left on a supply curve.
B
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A good is said to have a relatively elastic demand if the value of price elasticity is:
A) equal to 0. B) between 0 and 0.5. C) between 0.5 and 1. D) greater than 1.
The intersection of the demand for loanable funds and the supply of loanable funds determines the
A. Par value. B. Real interest rate. C. Prevailing interest rate. D. Price รท earnings ratio.
In a principal-agent problem, if the contract implies that the more risk-averse agent will bear less risk, we can say that this contract exhibits
A) efficiency in risk-bearing. B) risk sharing is not optimal because the less risk-averse (or risk-neutral) agent should bear none of the risk. C) risk sharing is not optimal because all risk should be transferred to the most risk-averse agent. D) risk sharing is not optimal because risk-neutral agents should face no risk.
Behavioral economics
A. suggests that consumers purchase health club memberships instead of paying per visit in an attempt to commit themselves to an exercise regime. B. has contributed to microeconomics but not to macroeconomics. C. suggests that too much variety may be welfare enhancing. D. blends insights from sociology and economics.