For a given set of prices, two consumers choose bundles that are off the contract curve. In a competitive market,
A) prices will adjust until the consumers choose bundles that are on the contract curve.
B) the indifference curves will shift back to the contract curve.
C) the contract curve will shift to connect these bundles.
D) no adjustments need to be made.
A
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The above figure shows the demand curve for movie rentals from Redbox. Which of the following is TRUE?
A) Consumer expenditure on movie rentals will always increase whenever Redbox lowers its price. B) Redbox will receive more total revenue if it charges $4.00 per movie rental rather than $3.00. C) The price elasticity of demand for movie rentals falls as Redbox raises its price. D) The demand for movie rentals is more price inelastic at $1.00 than it is at $1.50.
The source of hyperinflations is primarily
a. lower output growth. b. continuing declines in velocity. c. increases in money-supply growth. d. continuing increases in money demand.
If the cost of a typical basket of goods in the U.S. is $100 and in France it is 400 euros, and the nominal exchange rate is 2 euro per dollar, what is the real exchange rate?
A. 2.0. B. 1.5. C. 1.0. D. 0.5.
Adhering to a strict gold standard necessarily means that
A. each nation can vary its money supply in response to domestic economic conditions. B. no country will experience inflation. C. no country will have control over its monetary policy. D. no country will experience deflation.