If there is surplus of loanable funds, then
a. the supply for loanable funds shifts right and the demand shifts left.
b. the supply for loanable funds shifts left and the demand shifts right.
c. neither curve shifts, but the quantity of loanable funds supplied increases and the quantity demanded decreases as the interest rate rises to equilibrium.
d. neither curve shifts, but the quantity of loanable funds supplied decreases and the quantity demanded increases as the interest rate falls to equilibrium.
d
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A newspaper story on the effect of higher milk prices on the market for ice cream contained the following:
"As a result [of the increase in milk prices], retail prices for ice cream are up 4 percent from last year. . . . And ice cream consumption is down 3 percent." Source: John Curran, "Ice Cream, They Scream: Milk Fat Costs Drive Up Ice Cream Prices," Associated Press, July 23, 2001. Based on the information given, what is the price elasticity of demand for ice cream? A) 12% B) 0.75 (in absolute value) C) 1.33 (in absolute value) D) We do not have enough information to calculate the elasticity.
Exhibit 6-6 Total cost curves
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In Exhibit 6-6, the total fixed cost is:
A. 0. B. 1,000. C. 3,000. D. 5,000.
If the marginal propensity to save is 0.20, then the value of the tax multiplier is
A) -5. B) -4. C) 5. D) 1.2.
"30 people camp on the sidewalk in 10 degree weather for Phish reunion concert tickets, sold only at the door." In the economic way of thinking, the people camping out are
A) competing against other Phish fans for concert tickets. B) taking what they believe is an efficient strategy for acquiring a scarce good. C) planning to cooperate with the sellers of the concert tickets. D) doing all the above.