If a substitute good is easy to find, then demand for a good is
A) elastic.
B) inelastic.
C) unit elastic.
D) perfectly inelastic.
E) Substitutes don't have any effect on elasticity.
A
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In the model of monopolistic competition, compared to a firm with a lower marginal cost, a firm with a higher marginal cost will set a ________ price, produce ________ output, and earn ________ profits
A) higher; less; less B) lower; more; more C) higher; more; more D) lower; less; less E) higher; less; more
Which of the following decreases Money Demand?
a. Lower nominal interest rates. b. Higher nominal interest rates. c. A higher price level d. A lower price level
Using the annuity rule, it follows that an annuity with a present value of $100 and an annual payment of $20 must have an interest rate of:
A. 10 percent. B. 20 percent. C. 5 percent. D. 2 percent.
Suppose a bank will pay you a 10% interest rate on your deposits for 1 period. In this case you must sacrifice $10 of current consumption to finance
A. $1 of future consumption. B. $11 of future consumption. C. $10 of future consumption. D. $9 of future consumption.