The sign of the cross-price elasticity tells us whether two commodities are complements or substitutes, but the size of this elasticity measure tells us
a. how the supply side of the market reacts to changes in demand
b. whether the government should regulate the two markets
c. which technology producers use
d. how closely the two goods are related
e. whether or not excess profits can be made in either market
D
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The opportunity cost of money is:
A. the price level. B. the time spent going to the bank to withdraw funds. C. the nominal interest rate. D. the fees charged by banks to provide checking services.
Refer to above figure. What happens to the Consumer Surplus of Hungarian customers as a result of this subsidy?
What will be an ideal response?
Banks in the Diamond-Dybvig model can offer depositors increased liquidity because
A) both individual depositors' liquidity needs and average depositor liquidity needs are predictable. B) while individual depositors' liquidity needs are unpredictable, average depositor liquidity needs are predictable. C) while individual depositors' liquidity needs are predictable, average depositor liquidity needs are unpredictable. D) neither individual depositors' liquidity needs nor average depositor liquidity needs are predictable.
A straight-line Lorenz curve shows
A) an equal distribution of money income. B) a greater than proportionate share of income going to middle-income households. C) a high incidence of absolute poverty. D) a highly unequal distribution of income.