The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bag of corn chips?
A) 3 bottles of soda per bag of corn chips
B) 1/3 bottle of soda per bag of corn chips
C) $3
D) 33ยข
A
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An airline company
A) cannot price discriminate because it is against the law. B) price discriminates by charging higher prices to business travelers. C) price discriminates by charging lower prices to business travelers. D) price discriminates even though its profits are lower because competition forces it to do so. E) has fewer customers because it price discriminates than it would have if it did not price discriminate.
If higher inflation ensues from a temporary negative supply shock, and in response, the central bank raises interest rates, then ________
A) it is likely adopting a policy to stabilize inflation in the short run B) short-run inflation will fluctuate around (first go higher then go lower than) the long run level of inflation C) it will need to lower interest rates back to their original values to ensure that inflation returns to its original rate D) all of the above E) none of the above
In the classical model, changes in interest rates will always ensure that
A. consumption equals income. B. saving equals investment. C. consumption equals production. D. consumption equals investment.
According to the Lucas supply function, the economy will produce ________ output when prices are unexpectedly ________ than when prices are at their expected level.
A. the same; lower B. the same; higher C. more; higher D. less; higher