If the MPC = 0.9 and a household obtains $20,000 more dollars then how much would the household spend of the additional $20,000?

e-Bay

Find the price of a new Fender Squier Stratocaster guitar on eBay (you may use either the “Buy it Now” price or the final sale price from a recent auction). Compare this to the price of a new Fender Squier Stratocaster at Sam Ash and Musician’s Friend. Questions:

• How do the prices compare? Are the prices fairly close?
• Does the existence of the internet reduce price differences among sellers for products such as this?
• Revisit eBay and search for a Fender Stratocaster produced between 1960 and 1979. State the price (the final sale price or the “Buy it Now” price) and the vintage of the item you found. Has the availability of sites such as eBay made it easier to find such items? How does this affect the gains to trade for buyers and sellers?

If the quantity demanded is infinitely responsive to any change in price, the demand curve is:

A. upward sloping. B. downward sloping. C. horizontal. D. vertical.