Which scenario best exemplifies how money functions as a means of exchange?
a. Marcus makes a payment on his mortgage every month.
b. Indu knows that a stamp is $0.50 and a soda is $2, so a soda has the same value as four stamps.
c. Stefie gives Dan $8 and receives a new paperback novel in return.
d. Each month, a portion of Yolanda’s paycheck is deposited into a retirement account.
c. Stefie gives Dan $8 and receives a new paperback novel in return.
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The supply of a good will tend to be highly elastic if
A) additional resources to produce the good can be obtained quickly and with no increase in cost. B) its price rises quickly and sharply when the demand increases. C) the good has few close substitutes. D) the good is generally classified as a luxury. E) the good is generally classified as a necessity.
At the point where the disposable income line intersects the consumption function, saving:
a. equals consumption. b. equals disposable income. c. is less than zero. d. is equal to zero.
A business-stealing externality is
a. an externality that is likely to be punished under antitrust laws. b. the negative externality that occurs when one firm attempts to duplicate exactly the product of a different firm. c. an externality that is considered to be an explicit cost of business in monopolistically competitive markets. d. the negative externality associated with entry of new firms in a monopolistically competitive market.
"Rivalry" in consumption means that:
A. when one person buys a good, it is not available for another person to buy. B. there are many buyers of the good. C. there are multiple sellers of the good. D. a buyer may purchase goods from multiple sellers.