The price of an airline ticket rises as the amount of time between purchase and flight departure gets smaller. The airlines base the policy on the assumption that
A. consumers are not aware of airline prices.
B. consumer demand is unrelated to prices.
C. consumer demand becomes more elastic as departure time approaches.
D. consumer demand becomes less elastic as departure time approaches.
Answer: D
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Net capital outflow equals the difference between a country's
a. income and expenditure. b. investment and saving. c. purchases of foreign goods and services and sales of goods and services abroad. d. purchases of foreign assets and sales of domestic assets abroad.
Which of the following has been a problem faced by the FDIC in its provision of federal deposit insurance?
A. a relatively low number of bank failures each year, which has reduced the need for deposit insurance B. adverse selection arising from the tendency for banks to take on more risk after they receive deposit insurance C. moral hazard arising from the tendency for the highest-risk banks to be those most interested in obtaining deposit insurance in the first place D. moral hazard arising from the tendency for banks to take on more risk after they receive deposit insurance
A firm in a perfectly competitive industry is producing 50 units, its profit-maximizing quantity. Industry price is $2, total fixed costs are $25, and total variable costs are $40. The firm's economic profit is
A. $15. B. $30. C. $35. D. $60.
The cross-price elasticity of demand between good X and good Y is 0.5. Given this information, which of the following statements is true?
A. Goods X and Y are substitutes. B. Goods X and Y are complements. C. The demand for goods X and Y is income inelastic. D. The demand for goods X and Y is inelastic.