When demand is elastic, the absolute number for price elasticity will be
A. Equal to 1.
B. Greater than 0.
C. Greater than 1.
D. Less than 1.
Answer: C
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When a transaction takes place repeatedly, then one way to signal to avoid information asymmetry is:
A. building a reputation. B. screening. C. statistical discrimination. D. Any of these could be true.
Which of the following is true of banks? a. Banks reduce the opportunity cost of holding idle cash
b. Banks act as intermediaries between the government and private investors. c. Banks can reduce risk by lending to rich borrowers. d. Banks reduce the transaction costs of borrowing and lending money. e. Banks can reduce risks by extending more loans.
Phoebe and Rachel quit running in Central Park and join a health club to run on treadmills. This decision
a. has no effect on GDP. b. increases GDP. c. decreases GDP. d. increases nominal but not real GDP.
The parable called the Tragedy of the Commons applies to goods such as
a. fire protection and cable TV. b. tornado sirens and basic research. c. clean air and clean water. d. antipoverty programs and national defense.