Fiat money
A) has no or very little value except as money.
B) is rarely used in modern economies.
C) functions well only if can be redeemed for gold or other precious metals.
D) serves well as a medium of exchange, but not as a store of value.
Answer: A
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A continuing, long-term, large decline in the demand for coffee will not cause the price of coffee to fall much over the years if
A) coffee is not scarce. B) the demand for coffee is highly elastic. C) the demand for coffee is highly inelastic. D) the supply of coffee is highly elastic. E) the supply of coffee is highly inelastic.
A market failure associated with Keynesian economics is
A) pollution externalities. B) economic agents cannot agree on prices and wages that are socially efficient. C) insurance is imperfect. D) banking panics.
If quantity demanded for rice falls by 2% when price increases 8%, we know that the absolute value of the own-price elasticity of rice is:
a. 2.5. b. 0.25 c. 4.0 d. 0.40.
Define the following terms and explain their importance to the study of economics
a. principle of marginal productivity b. marginal physical product c. marginal revenue product d. derived demand e. economic rent