An individual's wealth constraint is determined by
a. the individual's level of education
b. the facts that wealth is given and so she must give up one kind of wealth in order to acquire another
c. overall conditions in the economy
d. the amount of wealth the individual chooses to hold in the form of money
e. the value of corporate stock
B
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Refer to the figure above. Which of the following statements is true when the credit demand curve is CD1 and the credit supply curve is CS1?
A) At all rates of interest above 3% there will be a tendency for real interest rates to fall. B) At all rates of interest above 4% there will be a tendency for real interest rates to fall. C) At all rates of interest above 2% there will be a tendency for real interest rates to fall. D) At all rates of interest above 1% there will be a tendency for real interest rates to fall.
The above figure shows the utility of wealth curve for a homeowner whose only possession is a $50,000 house. If there is a 20 percent chance that the home could be entirely destroyed, the highest price for insurance this person would pay is
A) $0. B) $5,000. C) $10,000. D) $20,000.
In the above figure, what price will a single-price monopoly set?
A) P1 B) P2 C) P4 D) P5
Firms tend to lower the price of their goods after acquiring a firm that sells a complementary good because
a. They gain market power b. There is an increase in the overall demand for their products c. The bundle has a more elastic demand than individual goods d. The bundle has a more inelastic demand than individual goods