In an monopolistic market there are:
A. Many buyers
B. Few buyers
C. Few sellers
D. Many sellers
C. Few sellers
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According to the household liquidity effect, higher stock prices lead to increased consumption expenditures because consumers
A) feel more secure about their financial position. B) want to sell stocks and spend the proceeds before stock prices fall. C) believe that their wages will increase due to increased profitability of firms. D) can now afford more expensive imports.
Luke won tickets to see a rock music concert. Even though Luke is a rhythm and blues fan, he goes to the concert anyway. Twenty minutes later, Luke decides he hates the music and the screaming fans, and he walks out an hour before the concert is scheduled to end. Luke's behavior demonstrates what economic concept?
A. Irrational behavior B. Rational behavior C. The fungibility of money D. None of these explain Luke's behavior.
Monetarists argue that the relationship between the amount of money which households and businesses want to hold and the level of national income
A. has decreased historically because of increased accessibility to credit. B. rises during recession and falls during periods of full employment. C. falls during recession and rises during periods of full employment. D. is stable.
In Figure 22.1, which area represents consumer surplus to the drug addict? 
A. AP*C B. 0P*CQ* C. 0BCQ* D. 0ACQ*