The slope of the perfectly inelastic demand curve is ________, the slope of the perfectly elastic demand curve is ________
A) undefined, zero
B) one, one
C) zero, undefined
D) one, zero
Answer: A
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When the Fed raises the federal funds rate,
A) the real interest rate is unchanged so investment and consumption expenditure are not changed. B) the real interest rate increases, thereby decreasing investment and consumption expenditure. C) the real interest rate falls, thereby increasing investment and consumption expenditure. D) investment and consumption expenditure increase, thereby raising the real interest rate. E) the real interest rate increases, thereby decreasing investment and increasing consumption expenditure.
The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered. At 10 concerts, the
A) marginal private cost equals the marginal external cost. B) marginal social cost equals $60,000. C) marginal private cost is more than $40,000. D) marginal external cost equals $60,000. E) marginal external cost equals $80,000.
What role does the price elasticity of demand play in markup pricing, i.e., how does it affect the firm's ability to mark up price over marginal cost?
What will be an ideal response?
For each of the following changes, which equilibrium curve (IS, LM, or FE) is shifted? Draw the change in the underlying demand or supply curves (for example, money demand and supply for the LM curve) and show how the equilibrium curve changes
(a) Expected inflation increases. (b) The future marginal productivity of capital increases. (c) Labor supply decreases. (d) Future income declines. (e) There's a temporary beneficial supply shock. (f) The nominal interest rate on money rises.