Which of the following will definitely occur when there is an increase in the supply of and decrease in demand for MP3 players?
A. an increase in equilibrium quantity
B. an increase in equilibrium price
C. a decrease in equilibrium price
D. a decrease in equilibrium quantity
Answer: C
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If capital deepening increases from $100 to $150 and this increase results in worker's productivity increasing from $60 to $70, and if there were 100 workers, then GDP would increase by
a. $10,500 b. $6,000 c. $1,500 d. $7,000 e. $1,000
Suppose nominal GDP equaled $10,988 billion while the M2 money supply was $6,063 billion. What was the velocity of the M2 money stock?
A. 0.45 B. 0.55 C. 1.81 D. 2.36
If the price of a good increases by 10 percent, its quantity demanded drops by 50 percent. The price elasticity of demand is:
A. 2.0 B. 1.0 C. -5.0 D. 0.2
Matt has $2000 saved for a trip at Spring Break. Over Christmas break he decides to spend $400 of it on gifts instead of putting the gifts on his credit card, thus avoiding interest charges. He gradually replaces it in his savings account over the next two months. An economist would say this behavior is:
A. rational. B. not observable. C. utility minimizing. D. irrational.