If the demand for a good decreases as income decreases, then the good is a(n):
A. complementary good.
B. normal good.
C. substitute good.
D. inferior good.
Answer: B
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All else held constant, which of the following is a necessary consequence of a depreciation of the U.S. dollar against other currencies?
A. U.S. exports will become cheaper relative to other nations' products. B. The terms of trade will move in favor of the United States. C. The United States will experience an increase in the volume of imports. D. International speculators will buy U.S. dollars and sell other currencies.
Answer the following statements true (T) or false (F)
1. The measure of elasticity will be the same at any place along a given straight-line, slanted demand curve. 2. If 1,000 units of a particular good would be purchased at 40 cents per unit but only 750 units would be purchased at 50 cents per unit, the demand for the good is inelastic. 3. Graphically, perfectly elastic demand is represented by a straight horizontal line. 4. It is possible for a change in the price of one commodity to lead to a change in the demand for another commodity. 5. Any time the market price moves away from its equilibrium position to a lower price, market action will tend to force it further away from its original equilibrium position.
A risky small business stands the best chance of finding external financing from
A) a commercial finance company. B) a commercial bank. C) an investment bank. D) trade credit.
One result of asymmetric information in health insurance markets is
a. an optimal number of insurance policies sold. b. adverse selection. c. externalities in consumption. d. a low marginal benefit of additional information for the buyer of insurance. e. The principal-agent problem.