People use water for trivial, unimportant purposes because
A) there is little demand for water.
B) its relative price is very low.
C) they don't realize how essential water is to life.
D) they don't realize the world's supply of water is limited.
E) they underestimate the total demand for water.
B
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Refer to Figure 15-12. In the dynamic AD-AS model, if the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues no policy, then at point B
A) there is pressure on wages and prices to fall. B) the unemployment rate is greater than the natural rate of unemployment. C) firms are producing above capacity. D) incomes and profits are falling.
A geographic region in which the benefits of having a common currency exceed the costs is
A) an optimum currency area. B) an exchange-rate mechanism. C) a currency board area. D) a common currency area.
Given implicit or explicit resource price agreements, if the actual price level is below the expected price level, the: a. economy will move rightward along the short-run aggregate supply curve. b. economy will move leftward along the short-run aggregate supply curve. c. short-run aggregate supply curve will shift to the left
d. long-run aggregate supply curve will become steeper. e. short-run aggregate supply curve will become flatter.
Demand for movie rentals is highly elastic. What will happen if a video store raises the price of a rental?
(A) It could possibly gain or lose revenue. (B) It would see no change in revenue. (C) It will gain revenue. (D) It will lose revenue.