Compare the real cost of commodity resources today (circa 2009) with their cost in the 1845–1850 period. What explains the change?
What will be an ideal response?
The real cost (inflation adjusted) of buying resource commodities in 2011 was about 50% lower than it was in the initial 1845–1850 period. The long-run decline in the prices of these commodities indicates that the supply of such resources has grown faster than the demand for them that arises because of population increase and rising consumption per person.
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You have a bond that pays $60 per year in coupon payments. Which of the following would result in a decrease in the price of your bond?
A) Coupon payments on newly-issued bonds rise to $75 per year. B) The likelihood that the firm issuing your bond will default on debt decreases. C) Coupon payments on newly-issued bonds fall to $40 per year. D) The price of a share of stock in the company rises.
The price elasticity of supply is calculated as the change in supply divided by the change in price
Indicate whether the statement is true or false