A price floor is a
a. fixed point on the supply curve that represents the lowest price a producer will accept
b. fixed point on the demand curve that represents the lowest price a consumer will pay
c. minimum price set by the government that is positioned above the equilibrium price
d. maximum price set by the government that is positioned above the equilibrium price
e. maximum price set by the government that is positioned below the equilibrium price
C
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Herd behavior can best be described as
A) the large number of investors involved in the stock market. B) how large participation in financial markets increase market efficiency. C) informed investors can outperform relatively uninformed investors. D) relatively uninformed investors follow the behavior of other investors instead of consider fundamentals.
The demand for durable goods tends to be more price elastic than the demand for non-durables
a. true b. false
Assume that a college student purchases only Ramen noodles and textbooks. If Ramen noodles are an inferior good and textbooks are a normal good, then the substitution effect associated with a decrease in the price of a textbook, by itself, will result in
a. a decrease in the consumption of textbooks and a decrease in the consumption of Ramen noodles. b. a decrease in the consumption of textbooks and an increase in the consumption of Ramen noodles. c. an increase in the consumption of textbooks and an increase in the consumption of Ramen noodles. d. an increase in the consumption of textbooks and a decrease in the consumption of Ramen noodles.
Figure 5-2
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In Figure 5-2, an increase in government spending would cause
A. an outward shift in the aggregate supply curve and an increase in the price level. B. an outward shift in the aggregate demand curve and an increase in the price level. C. an inward shift of the aggregate demand curve and an increase in the price level. D. an inward shift of the aggregate demand curve and a decrease in the price level.