The relationship between price and quantity demanded is said to be;
(a) Positive.
(b) Negative.
(c) Inverse.
(d) Negative or inverse.
Answer: (d) Negative or inverse
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If monetary policy is used to set the market equilibrium value of the exchange rate equal to the official value, it is no longer available to:
A. increase the market equilibrium value of an overloaded currency. B. decrease the market equilibrium value of an overvalued currency. C. stabilize the domestic economy. D. stabilize the market equilibrium value of the exchange rate.
Kyle and Stan are playing Odds or Evens, where Kyle is designated as the "odd" player and Stan is designated as the "even" player. They decide to play the game 10 times. At the mixed-strategy equilibrium in this zero-sum game,
A) each player's expected payoff equals zero. B) one player earns all possible points and the other player earns zero points. C) one player's payoff is positive and the other player's payoff is negative. D) There is never an equilibrium in a zero-sum game.
Public goods are those for which
A) individuals who do not pay can be excluded from consuming the good. B) individuals who do not pay cannot be excluded from consuming the good. C) external costs exist. D) no external costs exist.
An example of moral hazard is
a. people drive as carefully in icy conditions with antilock brakes as without b. people drive less safely with more airbags as without c. football players avoid 'spearing' with their heads even with safer helmets d. people read the medicine warnings as carefully when self-medicating versus with a doctor's prescription