Which of the following is the best example of a durable good?
a. the box of Dunkin' Donuts doughnut holes that you ate for lunch yesterday
b. a bottle of Calvin Klein Obsession (cologne)
c. your Ford Explorer
d. a box of pecan nuts
e. the services you bought when you had your ears pierced last week
C
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List and discuss the four economic functions that depository institutions provide their customers
What will be an ideal response?
A few years ago, the city of Seattle, Washington, considered imposing a specific tax on all espresso-based coffee drinks sold in the city. The extra tax revenue generated would have been used to fund after-school programs for low-income children
The coffee-house owners (firms) agreed that this would be a good program to fund, but they argued that the tax would sharply reduce their sales volume and they would pay most of the tax burden. This claim is true if: A) the demand for espresso-based coffee is more inelastic than supply. B) the demand for espresso-based coffee is more elastic than supply. C) there are no close substitutes for espresso-based coffee drinks. D) espresso-based coffee drinks can be produced at constant marginal cost.
Using the concepts of aggregate demand and aggregate supply, explain how the economy reaches an equilibrium level of real GDP and price level.
What will be an ideal response?
The economic system in which the basic economic questions are answered through markets with some government intervention is a:
A. command economy. B. mixed economy. C. market economy. D. planned economy.