Bargain airline fares in which airlines charge varying rates to passengers for the same flight and service is an example of
A. market penetration.
B. transaction pricing.
C. collusion.
D. price discrimination.
Answer: D
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Suppose that utility over consumption and leisure takes the constant elasticity of substitution form 
. If 
falls between 0 and -1, then the labor supply curve is backward bending.
Answer the following statement true (T) or false (F)
If real income rises 5%, prices rise 3%, and nominal money demand rises 7%, what is the income elasticity of real money demand?
A) 3/4 B) 4/5 C) 5/6 D) 6/7
If one day it was discovered that lime juice caused cancer, which of the following would likely result?
A) The supply curve for lime juice would shift to the right. B) The supply curve for lime juice would shift to the left. C) The demand curve for lime juice would shift to the right. D) The demand curve for lime juice would shift to the left.
Suppose you were given a gift of a gold mine that generates $1,000 of net income every year, indefinitely. And suppose the equilibrium rate of interest is 5 percent. What is the present value of that gold mine?
a. $20,000 b. $5,000 c. $50,000 d. $500,000 e. $10,000