Money cannot serve as a medium of exchange unless it also serves as a store of value. Is this statement true or false? Explain
What will be an ideal response?
This statement is true. If money does not hold its value over time, it will not be accepted in exchange for goods and services. I must be confident that money I accept today for a good or service rendered will be considered valuable tomorrow when I seek to trade it for a good or service. Lacking that confidence I will not accept money today.
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Suppose a judge is trying to decide whether, as a matter of fact, homeowners currently possess the right to prevent airplanes from flying low over their houses. The judge's ruling is correct if his decision results in
A) a fall in the market value of the houses. B) a rise in the market value of the house. C) no change in the market value of the houses. D) uncertainty about the market value of the houses.
The price reduction effect of the sale of a firm's last ?Q units of output is:
A. the additional revenue from selling ?Q units at price P(Q). B. the reduced revenue from selling (Q - ?Q) units at a lower price of P(Q). C. the additional revenue from selling ?Q units at price P(Q + ?Q). D. the reduced revenue from selling (Q - ?Q) units at a lower price of P(Q - ?Q).
Suppose Woody's Cabinetmaking calculates the following information for each cabinet produced in a given month: P = $300; Q = 100; AFC = $10; AVC = $140 . Woody's total profit for that month is
a. $140 b. $150 c. $15,000 d. $30,000 e. impossible to determine
Income elasticity of demand for a good has been calculated as - 4.0, therefore the good is:
(a) A substitute good. (b) A necessity. (c) A complementary good. (d) An inferior good.