Consumers are often somewhat insensitive to changes in the price of table salt because
A) the proportion of their budget spent on salt is very low.
B) there are a considerable number of good substitutes for salt, in their opinion.
C) they are not used to changes in the price of salt.
D) salt is a necessity for a complete dining experience.
E) all of the above reasons.
A
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The demand curve shifts rightward from D0 to D1 when the U.S. interest rate ________ and foreign interest rates are unchanged. The demand curve shifts rightward from D0 to D1 when the expected future exchange rate ________
A) falls; rises B) rises; rises C) falls; falls D) rises; falls E) None of the above answers is correct because the factors mentioned lead to movements along the demand curve and not to shifts of the demand curve.
In a barter system people:
A. have to specialize in order to have goods to trade. B. must be self-sufficient. C. cannot specialize because they never know what goods will be desired. D. are less likely to specialize as extensively as they would in a monetary economy.
In the market for saving, the price is the:
A. relative price. B. nominal interest rate. C. inflation rate. D. real interest rate.
Some agricultural sub-Saharan nations of Africa have overfarmed and overgrazed their land to the extent that significant portions of it have turned into desert. This suggests that:
A. the production possibilities curves of such nations are more bowed out from the origin. B. the production possibilities curves of such nations have shifted inward. C. the production possibilities curves of such nations have shifted outward. D. these nations are operating at some point outside of their production possibilities curves.