If the demand for hand-sewn leather shoes increases, it is likely the demand for leather will:
A. decrease slightly.
B. also increase.
C. drop significantly and producers will use another material.
D. stay the same.
Answer: B
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The real-balance effect indicates that at higher price levels
A) the real value of money holdings increase, resulting in increased saving. B) the purchasing power of money will increase. C) the real value of money holdings fall, resulting in decreased spending. D) the value of the dollar will increase.
Suppose your marginal utility from consuming the 3rd slice of cake is zero, then your total utility from consuming cake is
A) negative. B) increasing. C) maximized. D) decreasing.
If a Thai citizen borrowers dollars for a few months, hedging should take place if
a. the dollar is expected to fall in value over that time b. the dollar is expected to rise in value over that time c. the dollar is expected to fluctuate considerably over that time d. the dollar is expected to remain stable over that time e. none of the above
Which of the following government programs will NOT create a surplus?
A. farm price support payments B. the minimum wage law C. usury laws D. a price floor above the equilibrium price