What are the problems that arise when a commodity is used as money?
What will be an ideal response?
Commodities are not used as money because of several problems. Many commodities are bulky. And many commodities change in value over time. Using as money a commodity that changes in value would be awkward. Prices would change simply because the commodity's value changed. Additionally, using a commodity as money has a higher opportunity cost than do currency and bank deposits because the commodity has alternative uses that must be foregone.
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Linda Evangelista, a supermodel, once said that she "won't get out of bed for less than $10,000 a day." This fee is an example of
A) a reservation wage. B) the demand for Linda's labor. C) a competitive labor market. D) the substitution effect.
Under a relative concept of poverty, poverty
a. doesn't really exist. b. is higher in rich countries than in poor countries. c. can never be wholly eliminated by public policy. d. declines as technology advances.
When the government imposes an effective price ceiling on a monopolist, what will be sure to happen in the short run?
A. The dollar price will increase. B. There will be a shortage of the product. C. The dollar price will fall. D. There will be a surplus of the product.
Over the last 50 years, has the ratio of household production to gross domestic product in the United States increased or decreased? Consider the effect of the increased number of women working outside the home, and the effect of advances in technology
in household production such as microwaves, coffee makers, power tools, etc. What will be an ideal response?