Suppose that the market price for hot dogs sold by street vendors has just risen from $4.50 to $5.00, and that in response Curly has now begun operating a hot dog cart. We can assume that Curly's reservation price for hot dogs is:
A. $4.50.
B. at least $5.00.
C. greater than $4.50 but no more than $5.00.
D. $5.00.
Answer: C
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In order to analyze the factors that determine the quantity of real GDP demanded, in the aggregate expenditure model we assume that
A) real GDP does not change. B) the unemployment level is fixed. C) the inflation rate is assumed to equal the natural unemployment rate. D) the natural rate of unemployment is fixed. E) the price level is fixed.
In September 2008, the Reserve Primary Fund, a money market mutual fund, found itself in the situation know as "breaking the buck." This means that
A) they could no longer afford to redeem shares at the par value of $1. B) they required shareholders to contribute a dollar more in fees each month. C) shareholders were able to redeem shares for more than a $1. D) shares earned more than a dollar in interest.
"Framing effects" suggest that the wording of questions affects people's survey responses.
Answer the following statement true (T) or false (F)
Money is
A) an asset that people are willing to accept in exchange for goods and services. B) a liability that people are willing to accept in exchange for goods and services. C) the income one earns over a period of time. D) one's assets net of one's liabilities at any point in time.