If a consumer is compensated for the income effect that occurs when the price of a good increases, then his demand curves can never slope upward
Indicate whether the statement is true or false
True . The demand curve would only include the substitution effect. Even for Giffen goods, dq/dp is negative holding utility constant.
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During a recession when people's incomes drop, grocery chains experience much smaller declines in sales than do upscale department stores. Explain this phenomenon using the concept of elasticity
What will be an ideal response?
The formula for the multiplier is (1 - MPC)
Indicate whether the statement is true or false
Departures from interest parity
A) can be explained using theories of risk premium. B) cannot be explained using theories of risk premium. C) may or may not be able to be explained using theories of risk premium, more research is needed. D) are completely unrelated to risk premium. E) occur when risk premium is over calculated.
If Y = A × N × (75 + K/N), where K = 1000, N = 20, and A = 10, what happens if K doubles and N doubles?
A) Y is unchanged. B) Y increases by 50%. C) Y doubles. D) Y quadruples.