The elasticity of demand is determined partly by whether the good is a necessity or a luxury
a. True
b. False
Indicate whether the statement is true or false
True
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Which of the following is true?
i. Comparative advantage drives international trade. ii. Compared to a no-trade situation, in a market with imports, producer surplus is larger. iii. Tariffs lower the domestic price of imported goods. A) only i B) only ii C) only iii D) i and ii E) i and iii
A key finding of the economic analysis of financial structure is that
A) the existence of the free-rider problem for traded securities helps to explain why banks play a predominant role in financing the activities of businesses. B) while free-rider problems limit the extent to which securities markets finance some business activities, nevertheless the majority of funds going to businesses are channeled through securities markets. C) given the great extent to which securities markets are regulated, free-rider problems are not of significant economic consequence in these markets. D) economists do not have a very good explanation for why securities markets are so heavily regulated.
In the Keynesian model, the larger the marginal propensity to consume, the:
A. larger the multiplier. B. larger the marginal propensity to save. C. higher the income level of the economy. D. smaller the change in income derived from a given change in government spending.
Refer to the above figure. The top two arrows of the figure refer to the product markets. The bottom arrows refer to the factor markets. Which arrow represents the total monetary value of all goods and services?
A. Arrow A B. Arrow B C. Arrow C D. Arrow D