At a price of $5, Sam buys 10 units of a product. When the price increases to $6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct?
a. Yes, Martha is correct. Sam's demand decreased from 10 to 8 units.
b. No, Martha is incorrect. Sam's demand increased because price increased from $5to $6
c. No, Martha is incorrect. The quantity demanded decreased from 10 to 8 units but his demand remains unchanged.
d. No, Martha is incorrect. The quantity supplied to Sam has decreased from 8 units to 10 units but his demand remains unchanged.
e. No, Martha is incorrect. Sam's demand has increased, and his quantity demanded has decreased from 10 units to 8 units.
C
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For most consumers, the process of learning about the efficiency and durability of various brands of refrigerators can be considered
a. irrational b. unproductive c. a vocation d. nonmarket work e. costless
If a bank had demand deposits of $50 million and it faced a 25 percent required reserve ratio, it would be able to have a maximum amount of how many dollars worth of loans?
a. $50 million b. $37.5 million c. $25 million d. $12.5 million
Consumer surplus:
A. is minimized in market equilibrium. B. measures the value between the actual selling price of a product and the price at which sellers are willing to sell the product. C. measures the value between the price consumers are willing to pay for a product and the price they actually pay. D. measures the price at which sellers extract excess profits from consumers.
In game theory, the credibility of a threat:
A. determines whether or not a Nash equilibrium to a game exists. B. influences the degree of cooperation between two rivals. C. is relevant only in simultaneous games. D. determines whether or not a firm has a dominant strategy.