The opportunity cost of holding money is measured by the _____
What will be an ideal response?
interest rate.
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One of the drawbacks of cost-benefit analysis is that it _____
a. attempts to add up both the costs and the benefits b. is not compatible with utilitarianism c. cannot adjust for spending at different points in time d. focuses on total costs and benefits
Suppose the Good Food supermarket increases the price of a pound of bananas from $.75 to $1.25 and finds that the quantity of bananas it sells per month drops from 1,500 to 1,000 . The price elasticity of demand coefficient for bananas in this price range is:
a. 0.80 b. 3.00. c. 2.00 d. 0.50.
Alex sees that his neighbors' lawns all need mowing. He offers to provide the service in exchange for a wage of $20 per hour. Some neighbors accept Alex's offer and others refuse. Economists would describe Alex's behavior as:
A. rational self-interest because he is attempting to increase his own income by identifying and satisfying someone else's wants. B. greedy because he is asking for a high wage that some of his neighbors can't afford to pay. C. selfish because he is asking for a wage that is higher than others might charge. D. irrational because some neighbors refused his offer.
Refer to the above figure. A price ceiling has been set at P1, and a black market has opened. The equilibrium black market price will be
A. below P1. B. between P1 and P3. C. P2. D. above P3.