Refer to Figure 5-1. At the market equilibrium, the deadweight loss is equal to
A) $0. B) $500,000. C) $1,000,000. D) $2,000,000.
D
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Which statement is false?
A. Over the last three decades our money supply grew most years, but at widely varying rates. B. The U.S. dollar is based on Spanish currency. C. The interest rate on business loans is lower than the interest rate that banks pay their depositors. D. The distinction between commercial banks and other banks is becoming blurred.
If the elasticity of demand is 3, then a 10 percent increase in price will cause quantity demanded to fall by 3 percent.
Answer the following statement true (T) or false (F)
Suppose that an Italian ice cream firm is facing a linear demand curve and that the current price for the Italian ice cream is set at a point where the price elasticity is 0.7. If the firm decreases the product price,
A. the demand becomes more inelastic and total revenue increases. B. the demand becomes more inelastic and total revenue decreases. C. the demand becomes less inelastic and total revenue increases. D. the demand becomes less inelastic and total revenue decreases.
The interest payment on a bond is called
A) the coupon payment. B) principal. C) the interest rate. D) the face value.