An explanation for the low saving rate in the United States consistent with the demonstration effect includes:
A. well-developed financial markets making it easy to borrow against home equity.
B. large and persistent capital gains.
C. households spending beyond their means to keep up with community standards.
D. relatively generous government assistance for the elderly and large down payments required for home purchases.
Answer: C
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Assets minus liabilities equals
A) implicit costs. B) accounting profit. C) economic profit. D) net worth.
Southwest Airlines relies on jet fuel to operate its planes. If it chooses to hedge against future changes in fuel prices, what positions (long or short) will it take in the spot and futures markets?
What will be an ideal response?
A trade surplus occurs when:
A. exports exceed imports. B. government revenue exceeds government spending. C. exports are less than imports. D. government spending exceeds government revenue.
Refer to Scenario 19.3 below to answer the question(s) that follow. SCENARIO 19.3: Suppose demand for widgets is given by the equation P = 20 - 0.5Q. Originally, the price of the good is $10 per unit. When a tax of $2 per unit is imposed, the price of the good rises to $12 per unit.Refer to Scenario 19.3. Prior to the imposition of the tax consumer surplus was ________ and after the tax was imposed consumer surplus was ________.
A. $100; $64 B. $64; $100 C. $200; $128 D. $50; $32