An increase in the real interest rate will increase the
a. current market value of assets yielding income in the future.
b. size of the inflationary premium.
c. cost of current consumption goods relative to future consumption.
d. net present value of $100 to be received one year from now.
C
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When the price of a cup of coffee falls from $3.00 to $2.50, the quantity demanded increases from 1,000 per month to 1,150 per month. Using the midpoint method, the price elasticity of demand is
A) 0.77. B) 1.30. C) 0.07. D) 3.00. E) 2.50.
The marginal rate of technical substitution of labor for capital measures
a. the amount by which capital input can be reduced while holding quantity produced constant when one more unit of labor is used. b. the amount by which labor input can be reduced while holding quantity produced constant when one more unit of capital is used. c. the ratio of total labor to total capital. d. the ratio of total capital to total labor.