A common misperception about consumer demand is that
A. demand depends on many other variables.
B. price is a major determinant of quantity.
C. it is a fixed amount.
D. quantity cannot be determined in advance.
E. All of these responses are correct.
Answer: C
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Tele-Com, Inc., the nation’s largest cable TV company, tested the effect of a price reduction for the Disney Channel. It lowered prices from $10.75 to $7.95 and found that the number of customers more than doubled. This means the
A. demand curve for the Disney Channel shifted to the right. B. supply curve of the Disney Channel shifted to the left. C. demand for the Disney Channel is elastic in this price range. D. demand for the Disney Channel is inelastic in this price range.
Using Scenario 1 what is the maximum grade you could earn in any one course? If you wanted to earn a grade of 90 in French but no better than a 70 in economics are you operating on your budget constraint? Why or why not?
What will be an ideal response?
Municipal bonds pay a relatively
a. low rate of interest because of their high default risk and because the interest they pay is subject to federal income tax. b. low rate of interest because of their low default risk and because the interest they pay is not subject to federal income tax. c. high rate of interest because of their high default risk and because federal taxes must be paid on the interest they pay. d. high rate of interest because of their low default risk and because the interest they pay is not subject to federal income tax.
Consider the following statement, "The Federal Reserve fights recessions by increasing the money supply so people will have more money to spend." What is wrong with the statement and how can it be corrected?
What will be an ideal response?