You and your college roommate eat three packages of Ramen noodles each week. After graduation last month, both of you were hired at several times your college income. You still enjoy Ramen noodles very much and buy even more, but your roommate plans to buy fewer Ramen noodles in favor of foods she prefers more. When looking at income elasticity of demand for Ramen noodles, yours would
a. be negative, and your roommate's would be positive.
b. be positive, and your roommate's would be negative.
c. be zero, and your roommate's would approach infinity.
d. approach infinity, and your roommate's would be zero.
b
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Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and nominal value of the domestic currency rises. b. There is not enough information to determine what happens to these two macroeconomic variables. c. The real risk-free interest rate rises, and nominal value of the domestic currency remains the same. d. The real risk-free interest rate falls, and nominal value of the domestic currency falls. e. The real risk-free interest rate rises, and nominal value of the domestic currency falls.
Suppose that 1982 is the base year for the Consumer Price Index (CPI) and in 2014 the CPI was 190. What does this "190" mean?
A) What cost $100 in 1982 on average cost 190 times as much in 2014. B) What cost $100 in 1982 on average cost $190 in 2014. C) What cost $100 in 1982 on average cost 0.19 times as much in 2014 (that is, it cost $19 in 2014). D) What cost $100 in 1982 on average cost $19 more in 2014.
Minimum efficient scale is defined as
A. the point at which economies of scale are at their maximum. B. the amount of labor that maximizes the marginal product of labor. C. the point at which marginal cost, average variable cost, and average fixed cost are all equal. D. the lowest output level at which long-run average costs are at their minimum.
Economic rent is broadly defined as
A. a payment received by a landowner. B. a payment for the use of any resource that has a fixed supply. C. the dividend return on a share of stock. D. the return to owners of farmland.