Suppose that the demand for electricity has been found to be price inelastic. The most likely explanation for this finding is that:
A. few substitutes for electricity exist.
B. electricity is sold in a monopoly market.
C. electricity is a luxury good.
D. the fraction of income spent on electricity is large.
Answer: A
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Suppose Matt's New Cars issues a bond in which they'll need to pay $10,000 in one year, which includes 4% interest. How much will they receive for the bond?
A) $9,600 B) $9,615 C) $10,000 D) $10,400
The merchandise trade balance
a. reflects trade in intangibles like insurance and tourism b. includes personal gifts to friends abroad c. records the flow of financial assets like stocks and bonds d. equals the value of imports minus the value of exports e. equals the value of tangible products exported minus the value of tangible products imported
Unemployment that results from fundamental technological changes in production, or from the substitution of new goods for customary ones, is
a. the natural rate of unemployment b. not counted as detracting from full employment c. cyclical unemployment d. frictional unemployment e. structural unemployment
Answer the following statement true (T) or false (F)
1) Repeated games may involve either simultaneous or sequential decision making. 2) Negative-sum games do not exist because neither player has an incentive to play the game. 3) In a zero-sum game, the gains by one player will be exactly offset by the losses of the other. 4) In repeated games, players may be willing to accept lower payoffs in the short run in exchange for greater net payoffs over the long run. 5) In repeated games, credible threats are necessary for the players to reach a Nash equilibrium.