Which of the following is more likely to have perfectly elastic or nearly perfectly elastic demand?
A) a textbook required for an economics course
B) the guitar produced by a master craftsman
C) milk produced by a Wisconsin dairy farmer
D) the services offered by the only allergist in the community
C
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Explain the income and substitution effects of an increase in the interest rate on savings
What will be an ideal response?
A rise in the interest rate will generally result in people consuming more when they are old if the substitution effect outweighs the income effect
a. True b. False Indicate whether the statement is true or false
In late 2008, the value of the U.S. dollar expressed in British Pounds
A. decreased precipitously. B. remained essentially constant. C. was zero because it was almost impossible to sell dollars. D. increased sharply.
Status quo bias is the:
A. general resistance to change, often stemming from loss aversion. B. inefficiency that stems from constant change. C. inefficiency that stems from anchoring and adjustment. D. general enthusiasm for change, often stemming from regression to the mean.