The Mear Corporation finds that its total spending on machine parts increases after the price of machine parts falls, other things being equal. Which of the following is true about the Mear Corporation's demand for machine parts with the price change?
A. It is perfectly inelastic.
B. It is price inelastic.
C. It is unit elastic.
D. It is price elastic.
Answer: D
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The price elasticity of demand is a measure of the
A. relationship between price and profitability. B. sensitivity of a good's price to changes in demand. C. responsiveness of buyers of a good to changes in its price. D. effect of changes in demand on the price.
If a teacher tells a student that those who attend the study session typically score higher on the final exam,
A) the student has a positive incentive to attend the study session because she may get a higher grade. B) the student has a negative incentive to attend the study session because she will be punished if she does not go. C) the student has no greater incentive to attend because there is no guarantee she will get a higher grade on the exam. D) a "C" student will be making an irrational decision if she decides to skip the study session since she has plenty of time to go.
In recent years, the Fed has generally set the discount rate
a. lower than the federal funds rate to help financially troubled banks get more solvent. b. higher than the interest rate on 30-year fixed-rate mortgage loans. c. higher than the federal funds rate for most banks. d. equal to the rate of inflation.
________ of income redistribution argue that redistribution ________ those who, through no fault of their own, are unable to earn an adequate income.
A. Opponents; helps B. Proponents; harms C. Proponents; helps D. Opponents; harms