Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfare is $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1,400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfare is $450. Should you use the frequent flyer coupon to go to Miami?
A. No, because there are no benefits in the trip.
B. Yes, your benefit is more than your cost.
C. No, your benefit is less than your cost.
D. Yes, your benefit is equal to your cost.
Answer: C
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The proposition that in the long run when real GDP equals potential GDP, an increase in the quantity of money leads to an equal percentage increase in the price level is the called the quantity theory of
A) constant velocity. B) the long run. C) money. D) inflation. E) equal change.
In the short run the firm has at least one fixed input
a. True b. False Indicate whether the statement is true or false
Money serves as a medium of exchange when:
A. it is a means of holding wealth. B. there is direct trade of goods and services. C. it is a basic measure of economic value. D. it is used to purchase goods and services.
Answer the following questions true (T) or false (F)
1. The elasticity of supply is equal to the percent change in price for a given percent change in quantity. 2. The market supply curve under conditions of perfect competition is typically perfectly elastic. 3. An increase in supply will increase the quantity demanded.