An inferior good is a good whose quantity demanded
a. rises when its price falls.
b. falls when the price of a related good falls.
c. falls when the consumer's total utility rises.
d. rises when the consumer's real income falls.
d
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To economize means to
A) allocate available resources in a way that yields the most value to the economizer. B) behave in a selfish rather than generous manner. C) conserve as much as possible for future use. D) put economic theory to work. E) save rather than spend.
When OPEC raises the price of petroleum, American expenditures on oil imports increase, suggesting that
A. the United States’ elasticity of demand for imported oil is greater than one. B. the United States’ elasticity of demand for imported oil is less than one. C. imported oil and domestically produced oil are complementary goods. D. the short-run elasticity of demand for oil is greater than the long-run elasticity.
If the price is less that the firm’s AVC, the firm’s output
A. is determined by the relationship between MC and AVC. B. will drop to zero. C. will change to where MC = ATC. D. will increase to where P = AC.
The Fed is often considered the bankers' bank because it:
a. demands much more currency than it has available. b. no longer has a monopoly on printing paper currency. c. lowers the discount rate in order to restrict the money supply. d. holds bankers reserves, provides banks with currency and loans, and clears their checks. e. refuses to uses its power of open market operations when a quorum of state-chartered bankers petitions it.