If the marginal cost of producing vanity license plates is virtually zero (by prison inmates with little else to do), then states would maximize their profits on plate sales at the point on a linear demand curve where
A. demand is inelastic.
B. demand is elastic.
C. demand is unit elastic.
D. the demand curve crosses the horizontal axis.
Answer: C
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Suppose an individual faces a decision of whether or not to make an investment 2 years from now. The investment will cost $10,125, and it will yield a benefit b 2 years later. a. Suppose the individual treats a dollar 1 year from now the same way as $0.90 now. How low can b be for this individual to plan to make the investment in two years?
b. Now suppose that the individual's tastes are better characterized by the beta-delta model. Suppose delta is 0.9. For what values of beta will the individual plan the same course of action 2 years from now as he would in the typical delta model (with the same delta)? c. Suppose beta is 0.9 (with delta also equal to 0.9). How low can b be in order for the individual to be willing to undertake the investment when he faces the choice in 2 years? d. For what range of values for b does the individual from (c) plan to undertake the investment but then decides not to when the time comes? What will be an ideal response?
If the domestic income of a nation’s citizens increase, then we might expect net export spending to:
A. increase. B. decrease. C. remain constant. D. there is not enough information to determine what would happen.
If the interest rate is below the equilibrium, which of the following occurs in this market?
a. excess supply b. excess quantity supplied c. excess demand d. excess quantity demanded
The quantity demanded of an input normally rises as its price rises.
Answer the following statement true (T) or false (F)