Why do airlines tend to lower ticket prices in the winter?
a. Supply is relatively variable, and a drop in demand lowers equilibrium price.
b. Demand is relatively variable, and a drop in supply lowers equilibrium price.
c. A drop in both supply and demand lowers equilibrium price.
d. Supply is relatively fixed, and a drop in demand lowers equilibrium price.
e. Demand is relatively fixed, and a drop in supply lowers equilibrium price.
d
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According to the interest-rate-based transmission mechanism for monetary policy, a decrease in the money supply will cause the
A) interest rate to fall, causing planned real investment spending to rise and leading to an increase in aggregate demand. B) interest rate to fall, causing planned real investment spending to rise and leading to a decrease in aggregate demand. C) interest rate to rise, causing planned real investment spending to fall and leading to a decrease in aggregate demand. D) interest rate to rise, causing planned real investment spending to rise and leading to a decrease in aggregate demand.
The demand for one money is the supply of another money
Indicate whether the statement is true or false
In a perfectly competitive market, the first firm to adopt a new cost-saving technological advance will
a. buy more resources b. suffer an economic loss c. earn an economic profit until other competitors adopt the technology d. export to foreign markets e. supply low income neighborhoods
If average consumer incomes increase proportionately faster than the demand for a product, then the income elasticity of demand for the product is:
A. equal to 1. B. greater than 1. C. greater than zero but less than 1. D. zero.