Answer the following statement true (T) or false (F)
1) The consumer demand curve for a product is downsloping because marginal utility is constant when price declines.
2) The income effect explains an exception to the law of demand.
3) The substitution effect suggests that when consumers judge product quality by price, they will
substitute high-priced products for low-priced products.
4) Noncash gift-giving involves value loss when the marginal utility of the gift to the receiver is
less than the product price.
1) F
2) F
3) F
4) T
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Kyle and Stan are playing Odds or Evens, where Kyle is designated as the "odd" player and Stan is designated as the "even" player. They decide to play the game 10 times. At the mixed-strategy equilibrium in this zero-sum game,
A) each player's expected payoff equals zero. B) one player earns all possible points and the other player earns zero points. C) one player's payoff is positive and the other player's payoff is negative. D) There is never an equilibrium in a zero-sum game.
Under a fixed exchange rate regime, if a central bank must intervene to purchase the ________ currency by selling ________ assets, then, like an open market sale, this action reduces the monetary base and the money supply, causing the interest rate
on domestic assets to rise. A) domestic; foreign B) domestic; domestic C) foreign; foreign D) foreign; domestic