Suppose the value of price elasticity of demand for goods manufactured by firms A, B, C, and D are 0, -0.8, -1, and -1.5 respectively. The demand for the good will be elastic for:
a. firms A, B, C, and D.
b. firms B, C, and D.
c. only firm A.
d. firms C and D only.
e. only firm D.
e
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The cost of holding money balances increases when
a. the inflation rate decreases. b. the nominal interest rate increases. c. the nominal interest rate decreases. d. nominal GDP is far from full employment.
Moe has a big exam tomorrow. He considered studying this evening, but decided to hang out with Curly instead. If neither activity involves any explicit costs, and Moe always chooses rationally, it must be true that:
A. Moe gets less benefit from spending time with Curly than from studying. B. Moe gets more benefit from spending time with Curly than from studying. C. the opportunity cost of studying is greater than the value Moe gets from spending time with Curly. D. the opportunity cost of studying is less than the value Moe gets from spending time with Curly.
PriceQuantity Demanded$01,000$1400$2200$3100$425 Refer to the table, which shows the number of MP3 downloads demanded per month for the students at a certain university. Does this demand schedule conform to the law of demand?
A. Yes, because as the price falls, the quantity demanded also falls. B. No, because the demand for most goods does not follow the law of demand. C. Yes, because as the price falls, the quantity demanded rises. D. No, because there appears to be no relationship between price and quantity demanded.
The MPC can be defined as the:
A. Change in consumption divided by the change in income B. Change in income divided by the change in consumption C. Ratio of income to saving D. Ratio of saving to consumption