Which of the following will cause the demand curve for product A to shift to the left?
A. A decrease in the price of complementary product C
B. An increase in money income if A is an inferior good
C. An increase in money income if A is a normal good
D. Population growth that causes an expansion in the number of persons consuming A
Answer: B
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An increase in Meta's wealth from $3,000 to $6,000 raises her utility from 80 units to 100 units. If she is risk averse, with a wealth of $9,000 her utility might be
A) 99 units. B) 114 units. C) 120 units. D) 126 units.
An "unsecured" loan is one
A) with no stated collateral. B) that is pending approval by a bank loan committee. C) which has collateral. D) in which the borrower is delinquent in loan payments but has not formally defaulted on.
If the federal government sets a minimum price for wheat at $5.00 per bushel when the equilibrium price is $4.50, then
A) a surplus will be created causing the price to fall to the equilibrium price of $4.50. B) a permanent surplus will develop because the government established the minimum price at $5.00. C) a shortage will be created causing the price to rise to the equilibrium price of $4.50. D) a permanent shortage will develop because the government established the minimum price at $5.00.
Suppose a new government policy will generate $5,000 of benefits for local businesses and $3,000 of costs. This policy can best be described as
A. Pareto efficient. B. inefficient. C. equitable. D. potentially efficient.