The income elasticity of demand for food is roughly 1. A consumer's monthly income is $2,000, of which 20 percent is spent on food. If the income of this consumer doubles, the amount she'll spend on food will be:
A. $400 per month
B. $500 per month
C. $800 per month
D. $1000 per month
C. $800 per month
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The figure above shows Clara's demand for CDs. At a price of $5 for a CD, the value of Clara's total consumer surplus for all the CDs she buys is
A) $5. B) $10. C) $25. D) $125.
Under the Exchange Rate Mechanism of the European Monetary System, when the German mark depreciated below its lower limit against the British pound, the German central bank was required to buy ________ and sell ________,
thereby ________ international reserves. A) pounds; marks; losing B) pounds; marks; gaining C) marks; pounds; gaining D) marks; pounds; losing
According to the Gordon-Growth model, what will be the percentage change in the value of a stock of a company whose current dividend is $10.00 and whose dividends had been expected to grow by 3% but now are expected to grow by 4% per year?
A) 4.0% B) 17.8% C) 25.0% D) 33.3%
Refer to the above figure. Suppose the marginal benefit and the marginal cost curves of pollution abatement are normally shaped. Suppose the equilibrium is for a factory in Los Angeles
What would happen if the same factory were in the middle of Nevada? A) The marginal cost curve (1 ) would shift to (2 ) and there would be no difference in the level of abatement. B) The marginal cost curve (2 ) would shift to the left and there would be less abatement in Nevada. C) The marginal benefit curve (4 ) would shift to the left and there would be less abatement in Nevada. D) The marginal benefit curve (2 ) would shift to the right and there would be more abatement in Nevada.