Jim recently graduated from college. His income increased dramatically;from$5000 a year to $60,000 a year. Jim decides that instead of using the bus, he would buy a car. This implies that
a. The car is a normal goods for Jim
b. The car is an inferior goods for Jim
c. The bus and the car are complementary for Jim
d. Need information on the price of cars
a
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Jenna runs a small boutique in Capitola. She tells one of her suppliers that she is willing to pay $6 for a pair of wool hand warmers and not a dime more
On the basis of this information, what can you conclude about her price elasticity of demand for wool hand warmers? A) The price elasticity coefficient is 0. B) It is elastic. C) It is perfectly elastic. D) It is perfectly inelastic.
Economic models:
A) are used to explain how people think.
B) are used to explain how people behave.
C) are essential representations of the real world.
D) are never used for making economic projections or predictions.
If inflation is correctly anticipated, those who buy government bonds will:
A. suffer losses because they will be compensated by lower interest payments. B. suffer losses regardless of inflation because interest paid on government bonds is set by Congress. C. not suffer losses because they will be compensated by higher interest payments. D. not suffer losses because inflation does not affect the purchasing power.
Which of the following statements is true?
A. The total demand for money is directly related to the interest rate. B. A lower interest rate raises the opportunity cost of holding money. C. The supply of money is directly related to the interest rate. D. Bond prices and the interest rate are inversely related.