Refer to the above graph. What combination would most likely cause a shift from AD1 to AD3?
A. An increase in taxes and a decrease in government spending
B. A decrease in taxes and a decrease in government spending
C. An increase in taxes and an increase in government spending
D. A decrease in taxes and an increase in government spending
Answer: A
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Assume the current interest rate on a one-year bond is 7%, and the interest rate investors expect on the one-year bond one year from now is 3%
According to the expectations hypothesis, the current interest rate (per year) on a two-year bond should be A) 3%. B) 5%. C) 7%. D) 10%.
Some popular reality television programs follow people who buy the contents of abandoned storage lockers at public auctions. In most cases, several storeage lockers are sold in sequence during a particular auction
Occassionally, one of the buyers will purposefully bid much more than the expected value of a particular storage locker in order to intimidate the other bidders. What is a plausible explanation for these excessive bids? A) The buyer is trying to establish a reputation that may affect the outcome of later auctions. B) The excessive bids may be rational if they occur during the last auction of the day. C) The bidder is trying to establish a first-mover advantage, but only if they occur during the first auction of the day. D) The excessive bids represent a form of tacit collusion among the buyers.
Over the past couple of years, prices for personal computers have fallen dramatically, but suppliers have offered more and more of them for sale. Does this refute the law of supply? Explain
Which of the following would be the best example of consumer surplus?
a. Shaniqua does not get cell-phone service because she feels that it is worth less than the $30 a month fee. b. Nicolas pays $8 for a haircut that is worth $10 to him. c. Diego buys a house for $104,000 . the maximum amount that he would be willing to pay for it. d. Isabella purchases a book for $20 and uses a credit card to pay for it.