If the Federal Reserve increases the supply of money in the market, then bond prices will _____ and interest rates will _____.
a) fall; rise
b) rise; fall
c) rise; rise
d) fall; fall
Ans: b) rise; fall
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Coffee and donuts are complements in consumption. Suppose bad weather in the coffee producing regions of the world, which shifts the coffee supply curve leftward
How do the general equilibrium price and quantity outcomes compare to the partial equilibrium outcomes for this situation? A) General equilibrium price and quantity are higher B) General equilibrium price is higher and quantity is lower C) General equilibrium price is lower and quantity is higher D) General equilibrium price and quantity are lower
The concept of "demand" in economics refers to
A) the different quantities of a good or service people will buy at different possible prices. B) the different types of goods and services that people of different income levels want to buy. C) how changes in the prices of all goods affect people's buying behavior. D) changes in people's consumption behavior over time.
To enhance their prestige, some country clubs like to point to the fact that they have a waiting list for new members. Even at clubs with high initiation fees, it is common that prospective members have to wait three or more years before there is room for them on the membership rolls. How do these country clubs set the price of membership to ensure that they have a waiting list?
A. Set the membership price above the market clearing price. B. Set the membership price below the market clearing price. C. Set the price at a level that will generate a surplus of memberships. D. Set the price so that the quantity supplied of memberships exceeds the quantity demanded.
What is the principle of diminishing marginal utility?
What will be an ideal response?