A Marshallian, or uncompensated, demand curve reflects:
A. only the substitution effect of a price change.
B. only the income effect of a price change.
C. both the income and substitution effects of a price change.
D. neither the income nor the substitution effects of a price change.
C. both the income and substitution effects of a price change.
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A price floor that is set above the equilibrium price
A) causes suppliers to lower their prices. B) is binding. C) is non-binding. D) creates a shortage.
When two mutually exclusive projects are considered, the NPV calculations and the IRR calculations may, under certain circumstances, give conflicting recommendations as to which project to accept
The reason for this result is that in the NPV calculation, cash inflows are assumed to be reinvested at the cost of capital, while in the IRR solution, reinvestment takes place at A) the hurdle rate. B) the accounting rate of return. C) the prime rate. D) the project's internal rate of return.
One problem with the unemployment rate is that:
a. discouraged workers are included in the calculation. b. the data includes part-time workers as fully employed. c. underemployment is measured in the calculation. d. all of these are problems.
In an economy that relies upon barter,
a. trade does not require a double coincidence of wants. b. scarce resources are allocated just as easily as they are in economies that do not rely upon barter. c. there is no item in the economy that is widely accepted in exchange for goods and services. d. All of the above are correct.