Which of the following transactions is included in GDP?
A. Social Security check received by an elderly couple
B. funds received by a college student for working in the college dining hall
C. funds given to a family on welfare
D. funds given to a college student by her parents
Answer: B
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As new firms enter a monopolistic competitive industry, it can be expected that:
a. market price will increase. b. the output of existing firms will increase. c. profits of existing firms will increase. d. market demand should decrease. e. profits of existing firms will decrease.
A rightward shift in aggregate demand will cause an increase in the price level and no change in output if aggregate supply is
A. Downward-sloping to the right. B. Horizontal. C. Upward-sloping to the right. D. Vertical.
Explain the importance of self-interest in the operation of a market system
Please provide the best answer for the statement.
Paul wins a $500 watch in a sweepstakes and decides to keep it, even though he says he would have preferred to win $500 cash. Knowing Paul's preferences, how can we explain his decision to keep it?
A. Paul has a cognitive bias; he is ignoring a nonmonetary opportunity cost of already owning the watch. B. Paul has a cognitive bias, and it leads him to value the watch more because he owns it. C. Paul's implicit cost of ownership makes him feel as though he should keep the watch. D. All of these are true.