The risk-free rate is the interest rate:
A. at which one would lend if there were no risk of default.
B. borrowers get when the loan is extremely short term.
C. the government charges for the loans it gives out.
D. savers get on their deposits.
A. at which one would lend if there were no risk of default.
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Since an individual spends a small share of the income on salt, the elasticity of demand is likely to be low.
Answer the following statement true (T) or false (F)
Does a tax on buyers affect the demand curve?
A. Yes, it shifts down by the amount of the tax. B. Yes, it shifts to the left by the amount of the tax. C. Yes, it shifts up by the amount of the tax. D. No, there is change in the quantity demanded, but the demand curve does not move.
Darlene runs a fruit and vegetable stand in a medium-sized community where there are many such stands. Her weekly total revenue equals $3,500 . Her weekly total cost of running the stand equals $3,500, consisting of $2,500 of variable costs and $1,000 of fixed costs. An economist would likely advise Darlene to: a. shut down as quickly as possible because the stand is generating losses
b. keep the stand open because it is generating a normal profit. c. keep the stand open for a while longer because she is covering all of her variable costs and some of her fixed costs. d. keep the stand open for a while longer because she is covering all of her fixed costs and some of her variable costs.
That some firms are engaged in more than one type of business is explained, in some cases, by
a. moral injunctions such as the Golden Rule. b. the existence of charitable organizations. c. government regulations that discourage the internalization of externalities. d. the fact that the internalization of externalities sometimes coincides with the self-interest of the relevant parties.