Which of the following examples shows a perfectly elastic demand?
a. Red Barn Farms must reduce its price below the market price to get more buyers.
b. Peak Farms can sell as much as it wants at the market price.
c. Smyth Agriculture goes out of business because it couldn’t get enough buyers at the market price.
d. Moto Agriculture makes a huge profit because it increases its price above the market price.
b. Peak Farms can sell as much as it wants at the market price.
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Jane is attempting to maximize utility by selecting a market basket of goods. For each of the goods in the market basket the marginal utility per dollar spent is equal
There are some goods which are affordable but do not appear in the Jane's market basket. If Jane has maximized utility, the marginal utility per dollar spent on each of the goods that does not appear in the market basket is: A) too high. B) too low. C) zero. D) infinite. E) none of the above
Benefits from trade would not include
a. the ability of people and nations to specialize. b. a greater variety of goods and services becoming available. c. less competition. d. lower prices.
By using restrictive fiscal policy during the Great Depression, the government improved the economic situation.
Answer the following statement true (T) or false (F)
The Keynesian transmission mechanism might get blocked if
A) investment is insensitive to changes in interest rates. B) the goods market is not in equilibrium. C) the money supply increases too quickly. D) interest rates are too high before they fall.