The market demand curve for a good is found by
a. adding up the quantities demanded by all consumers at different prices of that good
b. adding up the quantities demanded by all consumers at different incomes
c. adding up the maximum price each consumer is willing to pay for each possible quantity of the good
d. varying consumers' total income and determining what prices they are willing to pay
e. vertically summing the individual consumers' demand curves
A
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Which of the following statements is correct for the price elasticity of demand along a linear, downward-sloping demand curve?
A) The price elasticity of demand is constant because the slope is constant. B) At low prices, demand is elastic but at high prices demand is inelastic. C) At high prices, demand is elastic but at low prices demand is inelastic. D) The price elasticity of demand is not defined for a linear demand curve because the slope is constant. E) None of the above answers is correct.
A perpetuity that pays $250 per year at an interest rate of 4% would have a market price equal to
A) $6,250. B) $25,000. C) $2,500. D) $62,500.
Which of the following best describes the income velocity of money?
A) V = PMs B) V = Y C) V = PY/Ms D) V = Ms/PY
An efficient allocation of resources exists if
a. one group of people can get more of the things they want without someone else having to give up anything. b. no one can get more of the things he wants without someone else having to give up something. c. the economy operates at any point under the production possibilities frontier. d. the economy is operating at any point above the production possibilities frontier.