If the Federal Reserve buys $1,000 in bonds and the reserve requirement ratio is 0.5, what happens to the money supply and the net worth of all banks?
a. The money supply decreases by $2,000 and net worth increases by $1,000.
b. The money supply increases by $500 and net worth increases by $500.
c. The money supply increases by $2,000 and net worth does not change.
d. The money supply increases by $500 and net worth does not change.
e. The money supply increases by $2,000 and net worth increases by $2,000.
C
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Bailey's Barber Shop knows that a 5% increase in the price of their haircuts results in a 15% decrease in the number of haircuts purchased. What is the elasticity of demand facing Bailey's Barber Shop?
a. 0.05 b. 0.10 c. 0.33 d. 3.0
In parts of Eastern Europe, companies maintain special guards to protect payday funds, to help move products to market, and to enforce immediate payment for products sold to retailers. All of these features indicate:
A. that property rights are respected and transaction costs are high. B. that property rights are weak and transaction costs are high. C. that property rights are respected and transaction costs are low. D. that property rights are weak and transaction costs are low.
Last year, Joan bought 50 pounds of hamburger when her household income was $40,000. This year, her household income was only $30,000 and Joan bought 60 pounds of hamburger
Holding everything else constant, Joan's income elasticity of demand for hamburger is A) negative, so Joan considers hamburger to be an inferior good. B) negative, so Joan considers hamburger to be a normal good. C) positive, so Joan considers hamburger to be an inferior good. D) positive, so Joan considers hamburger to be a normal good and a necessity.
The difference between what consumers have to pay for a particular and what they are willing to pay is known as
A) consumer surplus. B) producer surplus. C) deadweight costs. D) deadweight surplus.