Keynesians identify three principal motives for demanding money. They are the:
A. transactions demand, precautionary demand, and liquidity motive.
B. transactions demand, precautionary demand, and convertibility motive.
C. transactions demand, speculative demand, and volatility motive.
D. transactions demand, speculative demand, and precautionary demand.
Answer: D
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If the price elasticity of demand for U.S. automobiles is higher in Europe than it is in the United States, and transport costs are zero, a price-discriminating monopolist would charge
A) the same price for autos in the United States as in Europe. B) a lower price for autos in the United States than in Europe. C) a higher price for autos in the United States than in Europe. D) a less profitable price for autos in the United States than in Europe.
Answer the following statements true (T) or false (F)
1. The elasticity of savings with respect to interest rates is the percentage change in the quantity of savings divided by the percentage change in interest rates. 2. The cross-price elasticity of demand is the percentage change in the quantity of good A that is demanded as a result of a percentage change in the price of good B. 3. The general rule stating that the utility-maximizing choice between consumption goods occurs where the marginal utility per dollar is the same for both goods can be shown with this equation: 4. The typical response to higher prices is that a person chooses to consume less of the product with the higher price. This can occur either because of substitution effect or because of income effect, but not both.
As a rule, as a consumer acquires more and more of a good, the marginal utility declines
a. True b. False Indicate whether the statement is true or false
When the real output of an economy is above its equilibrium output, _____
a. sales increase unexpectedly b. inventories begin to grow as output remains unchanged c. businesses will increase their level of production d. there will be a decrease in the stock of inventories