Explain the role interest rates play in understanding the time value of money
What will be an ideal response?
The concept of interest is central in understanding the concept of the time value of money, which is the idea that a sum of money today is equivalent to a larger sum in the future due to interest rates. The interest rate determines how fast the amount of money that is invested will grow over time.
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Explain why market power leads to a deadweight loss. Is the total deadweight loss from market power in the United States large or small?
What will be an ideal response?
Marginal utility
A. is the usefulness a consumer derives from a certain good or service. B. is the utility a consumer derives from a certain good or service. C. increases as more of a good or service is consumed. D. is the additional utility derived from consuming one more unit of a good or service.
To be useful, a model must
A) predict accurately all of the time. B) predict more accurately than other models that have been developed. C) have assumptions that have been verified by empirical testing. D) explain and predict the behavior of every individual.
The demand for classical music is _______________ than is the demand for Beethoven's music because _______________.
A. less price elastic; classical music requires a smaller portion of one's income B. more price elastic; classical music requires a smaller portion of one's income C. less price elastic; the scope of the market for classical music is more broadly defined D. more price elastic; the scope of the market for classical music is more broadly defined