As a result of a decline in interest rates and a rise in household income, the demand curve for housing has shifted to the right, but has retained the same slope. Consequently, the elasticity of demand for housing
A. has declined.
B. has increased.
C. has remained unchanged.
D. cannot be compared.
Answer: A
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Refer to Figure 4-3. If the market price is $3.00, what is the consumer surplus on the second ice cream cone?
A) $0 B) $0.50 C) $3.00 D) $5.50
When an economy is in a liquidity trap
A) monetary policy cannot be used to influence the exchange rate. B) monetary policy can be used to drive interest rates down, but not to drive them up. C) there is an excess demand for bonds. D) people and institutions avoid holding cash balances. E) it can escape only by introducing a hard, or illiquid, currency.
Corporations have the disadvantage of which of these? (i) double taxation; (ii) unlimited liability.
A. (i) and (ii) B. (i) but not (ii) C. (ii) but not (i) D. neither (i) nor (ii)
The soil of the Middle Colonies is generally:
a. rocky and sandy. b. fertile and difficult to till. c. fertile and easy to till. d. alkaline and poorly drained.