The price elasticity of demand can be computed as
A) change in total utility/change in quantity.
B) change in price/change in quantity demanded.
C) percentage change in quantity demanded/percentage change in price.
D) change in quantity demanded/change in price.
Answer: C
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When the interest rate increases, people will adjust their precautionary demand for money
A) downward or upward depending upon the actual supply of money. B) upward. C) not at all. D) downward.
When money demand shifts, the Fed must choose between targeting the money supply and targeting the interest rate; it cannot target both
a. True b. False Indicate whether the statement is true or false
Suppose the United States has a comparative advantage over Mexico in producing pork. The principle of comparative advantage asserts that
a. the United States should produce more pork than what it requires and export some of it to Mexico. b. the United States should produce a moderate quantity of pork and import the remainder of what it requires from Mexico. c. the United States should refrain altogether from producing pork and import all of what it requires from Mexico. d. Mexico has nothing to gain from importing United States pork.
Which of the following is NOT a characteristic of the capitalist form of economic organization?
A. Central planning. B. A reliance on decentralized market processes for resource allocation purposes. C. Private ownership of productive resources. D. All decisions are made by the government.