In what two ways does trade benefit consumers when firms are monopolistically competitive?
a. better quality products, increased information
b. higher incomes, more dependable products
d. lots of bells and whistles, higher wages
d. lower prices, more variety
Ans: d. lower prices, more variety
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The natural rate hypothesis asserts that in the ________, the money wage rate is fixed and the ________ in the inflation rate brings a(n) ________ in the unemployment rate
A) short-run; decrease; increase B) short-run; increase; increase C) short-run; decrease; decrease D) short-run; increase; decrease E) long-run; increase; decrease
An example of someone who irrationally considers sunk costs when making a decision is most likely:
A. a family that pays $20 to enter a state park for the day and leaves after an hour. B. a family that pays $20 to enter a state park for the day and stays all day. C. someone who paid $50 for a ticket to a baseball game and ends up sitting through the entire game in the freezing rain without a jacket. D. someone who paid $50 for a ticket to a baseball game and ends up sitting through the entire game enjoying himself.
If the prices of both goods increase by 10 percent, the budget line
a. shifts to the right in parallel fashion. b. shifts to the left in parallel fashion. c. is unaffected since only relative price changes matter. d. pivots on the axis of the more expensive good.
All other thing unchanged, when the Fed sells government bonds, it aims to shift the aggregate demand curve to the right.
a. true b. false