Alan Krueger conducted a survey of fans at the 2001 Super Bowl who purchased tickets to the game for $325 or $400. Krueger found that (a) 94 percent of those surveyed would not have paid $3,000 for their tickets, and (b) 92 percent of those surveyed
would not have sold their tickets for $3,000. These results are an example of
A) rational consumer behavior.
B) the endowment effect.
C) the fallacy of composition.
D) the failure to ignore sunk costs.
Answer: B
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Under Alan Greenspan, the Fed strived to hit its goals of price stability and high employment through
A) setting targets for rates of growth in the M1 and M2 money supplies. B) practicing discretionary monetary policy, reacting to counter-changes in the level of unemployment during recessions and booms. C) setting targets for the federal funds rate of interest. D) strict adherence to rules based strategies.
Productivity is measured as output per unit of productive input
a. True b. False Indicate whether the statement is true or false
Which of the following is a plausible explanation for a firm paying above-equilibrium wages to its workers?
a. It increases the probability that a worker who shirks will be caught. b. It discourages workers from shirking out of fear of losing their high-paying job. c. The Condorcet Paradox suggests that paying high wages will result in greater effort by employees. d. By paying a high wage, employers solve this adverse selection problem and motivate the employees to work harder.
Competitive firms cannot individually affect market price because
A. There is an infinite demand for their goods. B. Their individual production is insignificant relative to the production of the industry. C. The government exercises control over the market power of competitive firms. D. Demand is perfectly inelastic for their goods.