If the price elasticity of demand for a good is 0.25, then a 20 percent decrease in price results in a
a. 0.0625 percent increase in the quantity demanded.
b. 4 percent increase in the quantity demanded
c. 5 percent increase in the quantity demanded.
d. 80 percent increase in the quantity demanded.
c
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In the market for factors of production, firms earn income by selling goods and services to households
Indicate whether the statement is true or false
The process in which people seeking higher yielding securities take their funds out of the banking system thus restricting the amount of funds banks can lend is called
A) capital mobility. B) loophole mining. C) disintermediation. D) deposit jumping.
Some people have argued that government should provide only those goods that we would truly define as public goods. If so, which of the following should government produce?
a. National Defense b. day-care centers for children of working mothers c. mail delivery d. unemployment benefits e. subsidies for agricultural products
Suppose Suzanne allocates her spending on apples and bananas according to the rational spending rule. If the price of apples is less than the price of bananas, then at Suzanne's optimal consumption bundle, her marginal utility from apples will be:
A. greater than her marginal utility from bananas. B. equal to zero. C. less than her marginal utility from bananas. D. equal to her marginal utility from bananas.