Monetarists believe that an increase in the money supply will lead to
a. a decrease in investment
b. an increase in the interest rate
c. a decrease in the price level
d. an increase in nominal GDP
e. an increase in real GDP
A
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Other things being equal, a price-discriminating firm will charge less to the customers who
A) have the lowest incomes. B) have the least elastic demand for its product. C) have the most elastic demand for the product. D) are the most rational in making their decisions.
If one firm sets the market price
a. the market is perfectly competitive b. the market is not perfectly competitive c. there are a large number of buyers who can buy from a wide range of competitors d. there is free entry into the market e. its product must be a standardized commodity, produced by many competitors
For which pair of goods below would an increase in income have the same effect on both goods?
A. A normal good and a luxury good. B. A superior good and a normal good. C. A normal good and an inferior good. D. An inferior good and a luxury good.
The more sensitive quantity demanded is to a change in price, the
A. closer the absolute price elasticity of demand is to zero. B. greater the absolute price elasticity of demand. C. smaller the absolute price elasticity of demand. D. smaller a change in price must be to induce a certain change in quantity demanded.