Elasticity of demand is likely to be higher for less-expensive goods, other things being equal
a. True
b. False
Indicate whether the statement is true or false
False
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In the above figure, suppose the demand for dollars temporarily increases so that the demand curve shifts to D1. To maintain the target exchange rate, the Fed
A) can sell dollars. B) can buy dollars. C) must violate interest rate parity but not purchasing power parity. D) cannot maintain the target exchange rate.
A maximin strategy
A) maximizes the minimum gain that can be earned. B) maximizes the gain of one player, but minimizes the gain of the opponent. C) minimizes the maximum gain that can be earned. D) involves a random choice between two strategies, one which maximizes potential gain and one which minimizes potential loss.
Which of the following transactions adds to U.S. GDP for 2015?
a. In 2015, Ann sells a car that she bought in 2011 to Bill for $7,000. b. An American management consultant works in Canada during the summer of 2015 and earns the equivalent of $40,000 during that time. c. When Ken and Kim were both single, they lived in separate apartments and each paid $800 in rent. Ken and Kim got married in 2015 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,700 per month. d. None of the above transactions adds to U.S. GDP for 2015.
According to the Economics in Action story “A Crushing Reversal” in the slides of chapter 7, what happened to the market for wine in the US between the mid-1990s and 2002? In the mid-1990s, demand for wine in the US increased, which first resulted in higher wine prices and profits until…
A) some producers exited the market so that lower supply pushed prices up even further. B) some producers exited the market so that lower supply pushed prices down again. C) new producers entered the market so that higher supply pushed prices up even further. D) new producers entered the market so that higher supply pushed prices down again.