All of the following statements about consuming in excess of one's disposable income are true, except:
A. It is possible, and it's called dissaving
B. In this case, the values of both saving and the APS are negative
C. (APC + APS) will be less than 1 in this situation
D. The value of APC will be greater than 1 in this case
C. (APC + APS) will be less than 1 in this situation
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The monopolist should NEVER produce in the
A) elastic segment of its demand curve because it can increase total revenue and reduce total cost by lowering price. B) inelastic segment of its demand curve because further lowering of the price reduces total revenue. C) range of output for which the price elasticity of demand is infinity. D) range of output for which there is a price elasticity exceeding one.
A popular teacher hands out candy bars to her students as an incentive for good behavior. If students choose to, they could then trade one candy bar for a sheet of stickers or two candy bars to skip a quiz. In this classroom, the teacher is using candy bars as a form of:
a) barter. b) commodity money. c) fiat money. d) yummy money.
A reason why fixed exchange rate systems might lower growth is that
A) inflation may be higher. B) monetary policy cannot be used. C) they are more risky. D) they deter international trade.
Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound. What takes place?
A) There is a shortage, so the price rises and quantity demanded increases. B) There is a shortage, so the price falls and quantity demanded increases. C) There is a surplus, so the price falls and quantity demanded increases. D) There is a shortage, so the price falls and quantity demanded decreases. E) There is a shortage, so the price rises and quantity demanded decreases.