Psychological incentives:
A. are not important in non-economic settings.
B. never serve as commitment devices.
C. can serve as commitment devices.
D. are not important in economic settings.
Answer: C
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In the figure above, if the firm is regulated using an average cost pricing rule, the consumer surplus created is equal to the area of
A) ABG. B) BEFG. C) BCFG. D) BCE. E) None of the above because there is no consumer surplus created.
"Dad said he'd pay for my education whether I go to State or to Ivy College. So I chose Ivy College, even though it'll cost him $15,000 more in tuition each year!" Pick the correct statement:
A) Her opportunity cost is $15,000 each year. B) Her opportunity cost is the satisfaction she would have experienced at State. C) Whether she realizes it or not, her opportunity cost is infinite, just like her dad's love is infinite. D) She has no opportunity cost, because her dad will pay for her education.
Refer to Table 3-2. The table above shows the demand schedules for cashews of two individuals (Jordy and Amy) and the rest of the market. At a price of $10, the quantity demanded in the market would be
A) 2 lbs. B) 48 lbs. C) 50 lbs D) 52 lbs.
Many economists refer to the Keynesian analysis as the “Keynesian revolution.” How was Keynesian analysis “revolutionary” in comparison to the classical doctrine?
What will be an ideal response?