The cross-price elasticity of demand between telephones and ramen noodles is most likely:
A. positive.
B. negative.
C. zero.
D. greater than one.
Answer: C
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According to the segmented markets theory of the term structure
A) bonds of one maturity are close substitutes for bonds of other maturities, therefore, interest rates on bonds of different maturities move together over time. B) the interest rate for each maturity bond is determined by supply and demand for that maturity bond. C) investors' strong preferences for short-term relative to long-term bonds explains why yield curves typically slope downward. D) because of the positive term premium, the yield curve will not be observed to be downward-sloping.
If government imposes a price ceiling on a good that is below the market equilibrium price
A) a surplus will develop. B) a shortage will develop. C) producers will reduce their sales price. D) consumers will reduce their demand for the good.
At the time of his retirement, an individual was able of purchase a basket of goods for $100 . If the price index rises by 3 percent every year, he would require _____ to purchase the same basket of goods 5 years later
a. $103.5 b. $120 c. $150 d. $115.9
In Figure 29.1, the area that represents the value to the consumer under perfect competition is
A. OACQPC. B. PPCAC. C. OABQMonopoly. D. ABC.