PriceQuantity Demanded$01,000$1400$2200$3100$425 Refer to the table, which shows the number of MP3 downloads demanded per month for the students at a certain university. Does this demand schedule conform to the law of demand?
A. Yes, because as the price falls, the quantity demanded also falls.
B. No, because the demand for most goods does not follow the law of demand.
C. Yes, because as the price falls, the quantity demanded rises.
D. No, because there appears to be no relationship between price and quantity demanded.
Answer: C
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Moral hazard is a barrier to financing global growth because
A) of the differences between financing using loans, portfolio investment and foreign direct investment. B) there is the possibility that the funds are used for riskier behavior than the lender agreed to. C) firms sometimes have trouble determining whether they need funds or not. D) if investors have trouble identifying high-risk firms they may be unwilling to give money to creditworthy firms.
Which of the following statements best explains how the use of money in an economy increases economic efficiency?
A) Money increases economic efficiency because it is costless to produce. B) Money increases economic efficiency because it discourages specialization. C) Money increases economic efficiency because it decreases transactions costs. D) Money cannot have an effect on economic efficiency.
If the shut-down rule, p < AVC, is the same in the short run and the long run, explain why the shut-down prices may be different
What will be an ideal response?
Extremely cold winter weather has destroyed oranges in Florida. The freeze has caused
A) scarcity because there are less oranges now than people want. B) scarcity because people have to switch to other types of citrus fruits. C) a shortage because people cannot obtain as many oranges as they wish to buy at the pre-freeze price. D) a shortage because the orange growers will have less income.