The precautionary demand for holding money arises because
A) people want be able to make unexpected purchases or to meet emergencies.
B) credit cards charge low interest rates, which makes money more attractive than credit.
C) expected transactions are completed more easily with debit cards than with credit cards.
D) people would rather hold money in the form of time deposits than in the form of hard currency.
A
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If MFC > MRPL, the firm should
A) hire more workers. B) lower wages. C) get rid of some capital. D) reduce the number of workers.
When the price elasticity of demand for a good is 1.5, this means that a 1 percent change in price creates a ______ in quantity demanded
a. 0.1 percent increase b. 1.5 percent decrease c. 1.5 percent increase d. 15 percent increase e. 15 percent decrease
Assume that black beans and rice are consistently in the diet of one particular family. How could you tell if these goods were complements, substitutes, or unrelated goods?
a. If the price of black beans rose and the consumption of rice remained the same, they would be substitutes. b. If the price of black beans rose and the consumption of rice increased, they would be substitutes. c. If the price of black beans rose and the consumption of rice decreased, they would be substitutes. d. If the price of black beans rose and the consumption of both goods remained the same, they would be complements.
Each year around July 4 the town of Flagston has a controversy over how big a fireworks display they should have on the holiday. The three citizens have the demand functions for fireworks that are shown here. The cost per firecracker is $18. Elmer has the demand function P = 20 - Q. Ethel's demand equation is P = 12 - .6Q, and Edith has the demand P = 8 - .4Q.Draw a graph of the individual demand equations and the total community demand for fireworks. Sketch in the marginal cost function as well.
What will be an ideal response?