Would a profit-maximizing firm sell at a price where demand is inelastic? Explain.
What will be an ideal response?
No. If demand is inelastic, then marginal revenue is negative. The firm could not possibly follow the profit-maximizing rule of MR = MC.
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The higher the nominal interest rate, the
A) greater the opportunity cost of holding money. B) lower the quantity of money demanded. C) more the demand for money curve shifts leftward. D) Both answers A and B are correct.
The ratio of the percentage change in quantity demanded to the percentage change in income is known as the cross elasticity of demand.
Answer the following statement true (T) or false (F)
What do behavioral economics and neuroeconomics seek to achieve?
What will be an ideal response?
Which of the following would NOT cause the demand curve for bonds to shift?
A) a change in wealth B) a change in the price of bonds C) a change in the liquidity of bonds D) a change in expected inflation