Samantha buys a bond in the amount of $1,000 with a promised interest rate of 18 percent. If the market interest rate decreases to 3 percent, Samantha can sell his bond for up to
A. $3,000.
B. $2,000.
C. $5,000.
D. $6,000.
Answer: D
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If the world price for good A is above the domestic price for good A without trade, then the price the consumer pays for good A will ________ and the price the producer receives for good A will ________ with trade.
A. increase; increase B. decrease; increase C. decrease; decrease D. increase; decrease
If cars are normal goods, a fall in income will
a. Increase the demand for cars b. Decrease the demand for cars c. Have no effect on the demand for cars d. None of the above
The behavior of regulators when trying to win approval for their actions from their entire constituency is best described by the
A. share-the-gains, share-the-pains hypothesis. B. marginal benefit pricing hypothesis. C. capture hypothesis. D. law of increasing social well-being.
The buyers pay the entire sales tax levied on a good when demand is perfectly ________ or supply is perfectly ________
A) elastic; inelastic B) elastic; elastic C) inelastic; inelastic D) inelastic; elastic