In laboratory experiments, how do animals respond to economic stimuli?
a. The animals' behaviors are consistent with economic theory.
b. The animals' responses are random and unpredictable.
c. The results indicate that the animals' tastes must be constantly changing.
d. The animals do not respond at all to subtle variations in "prices" and "incomes."
a. The animals' behaviors are consistent with economic theory.
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According to the permanent income hypothesis, the impact of ________
A) a change in permanent income on consumption is greater than the impact resulting from a change in transitory income B) a change in transitory income on consumption is greater than the impact resulting from a change in permanent income C) a change in transitory income is felt primarily through changes in the total tax revenue paid to the federal government D) a change in permanent income on consumption is larger than the impact resulting from a change in future income
Owners of a coffee shop finds that they can sell 150 donuts a day when the price of a donut is $1.20. When they price donuts at $1, they sell 170 donuts. The absolute value of the price elasticity of demand for donuts is
A) 0.69. B) 1.45. C) 1.00. D) infinity.
Which of the following forms of money will earn at least some interest income?
a. Gold coins b. Currency notes c. Traveler's checks d. Checkable deposits e. Gift checks
What is the opportunity cost of moving from point B to point C?
