John has $4000 in savings to buy an engagement ring for his girlfriend even though he has no plans to propose in the near future. When his transmission needs to be replaced in his car, John charges the $2000 worth of auto repair. John's decision is an example of:
A. people recognizing that money is fungible.
B. everyday expenses being easier to charge than big purchases.
C. people making false distinctions about their money.
D. over consumerism.
C. people making false distinctions about their money.
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If real income rises 5%, prices rise 3%, and nominal money demand rises 7%, what is the income elasticity of real money demand?
A) 3/4 B) 4/5 C) 5/6 D) 6/7
A perfectly competitive firm has
a. A perfectly elastic demand for its products b. A perfectly inelastic demand for its products c. A downward sloping demand for its products d. None of the above
Clark enjoys fishing and hunting. He divides his leisure hours between the two outdoor activities. Suppose we were to draw Clark's indifference curves for the two activities, placing fishing on the horizontal axis and hunting on the vertical axis. If Clark's indifference curves are bowed inward, then
a. the rate at which he is willing to give up an hour of hunting for an hour of fishing changes depending on how many hours of each activity he has done. For example, if Clark has already fished a lot in one week, he will be more willing to give up an hour of fishing for an hour of hunting than if he has only fished a little that week. b. the rate at which he is willing to give up an hour of hunting for an hour of fishing is constant because he must derive the same enjoyment out of each activity. c. the rate at which he is willing to give up an hour of hunting for an hour of fishing changes depending on how many hours of each activity he has done. For example, if Clark has already fished a lot in one week, he will be less willing to give up an hour of fishing for an hour of hunting than if he has only fished a little that week. d. Clark's indifference curves will not cross. When indifference curves are bowed outward, the indifference curves must cross.
Which of the following price-quantity data would not be part of the demand curve derived from the graph below? 
A. Price = 4, quantity = 14 B. Price = 2, quantity = 12 C. Price = 10, quantity = 5 D. Price = 0, quantity = 10