In early 2005, inflation increased unexpectedly due to an increase oil prices. This helped
A. workers.
B. borrowers.
C. lenders.
D. people on fixed incomes.
Answer: B
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Netflix introduced DVD rentals via US Mail whereby customers do not have to leave their home to rent movies. They also introduced the concept of no-late fees. Netflix has enjoyed strong profits over the last few years
However, what does economic theory tell us should happen to these profits in the long run and why?
A farmer lives on a flat plain next to a river. In addition to the farm, which is worth $F, the farmer owns financial assets worth $A. The river bursts its banks and floods the plain with probability P, destroying the farm
If the farmer is risk averse, then the willingness to pay for flood insurance unambiguously falls when A) F is higher, and A is lower. B) P is lower, and F is higher. C) F & A are higher. D) P is lower, and A is lower. E) A is higher, and F is lower.
When a union bargains successfully with employers, in that industry,
a. both wages and unemployment increase. b. wages increase and unemployment decreases. c. wages decrease and unemployment increases. d. both wages and unemployment decrease.
The price elasticity of demand measures
A) the consumers' sensitivity to a price change. B) the producers' sensitivity to a price change. C) how much the market supply changes in response to a change in demand. D) how much the demand changes in response to a change in income.