The longer the time frame involved, the more likely it is that the demand will be relatively
A) elastic.
B) inelastic.
C) steep.
D) flat.
A
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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
Which of the following is a distinguishing characteristic of a user charge?
a. Persons pay roughly in proportion to the extent that they use the good or service. b. Persons with high incomes pay a larger amount than persons with lower incomes for the same good or service. c. Persons with high incomes pay a larger percentage of their income than persons with lower incomes for the same good or service. d. Persons with high incomes pay a smaller percentage of their income than persons with lower incomes for the same good or service.
The tools of monetary policy are
A. government spending, tax rates, and the required reserve ratio. B. open market operations, government spending, and the required reserve ratio. C. open market operations, differential between the discount rate and the federal funds rate, and the required reserve ratio. D. open market operations, differential between the discount rate and the federal funds rate, and tax rates.
Monopolistic competition and perfect competition are different in that
A) only monopolistically competitive firms advertise. B) only monopolistically competitive firms can earn economic losses in the short-run. C) only perfectly competitive firms maximize profits where marginal revenue equals marginal cost. D) only perfectly competitive firms are characterized by long-run economic profits of zero.