Questions 4 and 5 show that the demand curve facing any firm and hence the pricing policy it chooses
What will be an ideal response?
may shift in response to the firm's own pricing policy, making the demand curve quite indeterminate.
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Explain what will happen to the equilibrium price and quantity of hybrid automobiles if there are technological advancements in the production of hybrid automobiles while at the same time consumer preference for hybrid automobiles increases
What will be an ideal response?
A reduction of the discount rate by the Federal Reserve Banks has the direct effect of
A) making it less costly for commercial banks to borrow from the Fed. B) making it more costly for the Treasury to finance deficits. C) increasing commercial bank reserves. D) increasing the stock of money. E) doing all of the above.
We could try to use a powerful computer to construct a macroeconomic model including tens of thousands of demand and supply curves, for every market in the economy. This would not be a useful undertaking because
a. it would not be worth the increased level of complication and effort needed to collect all information b. the model would be simplistic c. the model would inevitably leave out important information d. the suggested prices would inevitably be wrong in each market e. the model would not be realistic
According to the adaptive rationality standard, people's goals:
A. are a choice variable, and people's choices about which goals to pursue are made efficiently. B. are fixed, and people are efficient at pursuing whatever goals they happen to hold at the moment of action. C. are fixed, and people are often inefficient at pursuing those goals, which explains why people experience regret. D. are a choice variable, and people may not be efficient at choosing which goals to pursue.