When you purchase the lower-priced store brand bread instead of the more expensive name brand, you are experiencing
A. a fall in total utility.
B. diminishing marginal product.
C. the income effect.
D. the substitution effect.
Answer: D
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When first-degree price discrimination is perfectly implemented
a. social gain is maximized, with all gains going to the monopoly. b. consumers' surplus and producer's surplus are both larger than in the case of simple monopoly. c. the resulting deadweight loss is larger than if the monopoly did not price discriminate. d. the consumers' and producer's gains from trade are identical to those in a competitive market.
In a business cycle recession, which of the following occurs?
A) The quantity of investment demanded increases and there is a movement down along the demand for loanable funds curve but no shift in the curve. B) Investment demand increases and the demand for loanable funds curve shifts rightward. C) Investment demand decreases and the demand for loanable funds curve shifts leftward. D) The quantity of investment demanded decreases and there is a rightward shift of the demand for loanable funds curve. E) The quantity of investment demanded decreases increases and there is a movement up along the demand for loanable funds curve but no shift in the curve.
Taking actions that reduce risk
A) raise your expected value. B) makes you less risk-averse. C) are impractical in most circumstances. D) change your utility function.
Which of the following is a role of a financial intermediary?
a. Increasing risk to lenders b. Combining a large number of loans of small borrowers into a small number of deposits of large savers c. Decreasing liquidity for savers d. Reducing risk to depositors e. Increasing interest rates for both borrowers and lenders