As a person's wealth increases we would expect the demand for money to:
A. decrease.
B. not change; money demand does not vary with wealth, only with income.
C. increase dollar for dollar with wealth.
D. increase but at a rate less than dollar for dollar.
Answer: D
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Two nations, Alpha and Beta, can both produce steel. Alpha has a comparative advantage in the production of steel if it
A. has a higher domestic opportunity cost of producing steel than Beta. B. uses more steel than Beta. C. can produce more steel than Beta. D. has a lower domestic opportunity cost of producing steel than Beta.
Under a flexible exchange rate system, exchange rates are determined by free markets
Indicate whether the statement is true or false
The only goods you consume are pizza and soda. Both are normal goods. For you, pizza and soda are substitutes. Which of the following leads you to buy more of both goods?
A) The price of a pizza falls. B) The price of a soda falls. C) Your income increases. D) Both answers A and B are correct.
The marginal factor cost is the
A) additional revenue obtained from a one-unit change in labor input. B) additional revenue obtained from a one-unit change in output. C) change in output resulting from the addition of one more worker. D) cost of using an additional unit of an input.