Suppose Whitney is willing to pay $200 to buy a new phone. Loss aversion implies that if Whitney already had just bought the phone, you would:
A. have to pay her exactly $200 to part with it.
B. not be able to get her to part with it for any amount of money.
C. have to pay her less than $200 to part with it.
D. have to pay her more than $200 to part with it.
Answer: D
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An increase in aggregate demand causes an increase in ________ only in the short run, but causes an increase in ________ in both the short run and the long run
A) real GDP; real GDP B) real GDP; the price level C) the price level; real GDP D) the price level; the price level
If the price elasticity of demand for automobiles is 2:
A. a 10 percent increase in price would result in a 10 percent decrease in quantity demanded. B. a 10 percent increase in price would result in a 20 percent increase in quantity demanded. C. a 10 percent decrease in price would result in a 20 percent decrease in quantity demanded. D. a 10 percent decrease in price would result in a 20 percent increase in quantity demanded.
?If a good is offered free of charge, one would:
a. ?stop consuming it when its marginal utility begins to increase. b. ?never consume it because it has no market value. c. ?never stop consuming it. d. ?stop consuming it when its marginal utility begins to fall. e. ?stop consuming it when its marginal utility has declined to zero.
When demand is perfectly elastic, marginal revenue is
A. increasing. B. zero. C. declining. D. equal to price.