Refer to Figure 2.1. At point A, demand is:
A) completely inelastic.
B) inelastic, but not completely inelastic.
C) unit elastic.
D) elastic, but not infinitely elastic.
E) infinitely elastic.
E
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Which of the following is not a characteristic of indifference curves?
A. They are negatively sloped. B. They never intersect. C. They are concave toward the origin. D. Combinations of goods that include more of both goods are preferred, on a higher indifference curve.
Answer the following statements true (T) or false (F)
1. If the marginal propensity to consume were four-fifths, the size of the multiplier would be 5. 2. The multiplier is the reciprocal of the marginal propensity to consume. 3. The multiplier is the relationship between the initial change in aggregate expenditure and the resulting change in income. 4. The higher the propensity to save, the larger the size of the multiplier. 5. If planned investment increases by $20 billion, other things remaining the same, planned saving eventually will increase by $20 billion, regardless of the size of the multiplier.
A study of New York City (NYC) tax rates concluded that taxes on the nonmanufacturing sector should be higher since that sector has fewer alternatives. Manufacturers are more mobile and may move to avoid higher taxes. This means that
a. nonmanufacturing firms have a more elastic demand for NYC locations. b. manufacturing firms have an inelastic demand for the NYC locations. c. nonmanufacturing firms have relatively inelastic demand for the NYC locations. d. nonmanufacturing demand for NYC locations is perfectly elastic.
Assume Joe invests a total of $10,000 in a company - $5,000 of which is his own money and $5,000 which he borrowed at a 10% interest rate. If the company's stock value decreases by 5% in one year at which time Joe sells his shares of the stock, what is Joe's rate of return on his investment?
a. ?5% b. ?10% c. ?20% d. ?30%