What is a market? Must a market have a single physical location?
What will be an ideal response?
A market is any arrangement that allows buyers and sellers to get together and transact their business. Although some markets have a physical location, such as a farmers' market where buyers and sellers of fresh corn can meet face-to-face, markets do not require an actual location. Indeed, many markets, such as the local market for apartments, do not have a single physical location. Nonetheless, buyers and sellers (tenants and landlords) arrange purchases and sales (the rental of apartments and houses) through means other than meeting in one central location.
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Which of the following could create a movement along the short-run Phillips curve so that the unemployment rate temporarily falls below the natural unemployment rate?
A) an increase in aggregate demand and a quickly responsive wage rate B) a decrease in aggregate demand and a sticky wage rate C) an increase in aggregate demand and a sticky wage rate D) an increase in aggregate supply and a sticky wage rate E) a decrease in aggregate demand and a quickly responsive wage rate
Billy's income elasticity of demand for ground beef is -0.5 and his income elasticity of demand for pork chops is 1.2 . Is ground beef a normal or inferior good? Explain. What about pork chops?
What will be an ideal response?
When using panel data and in the presence of endogenous regressors
A) the TSLS does not exist. B) you do not have to worry about the validity of instruments, since there are so many fixed effects. C) the OLS estimator is consistent. D) application of the TSLS estimator is straightforward if you use two time periods and difference the data.
In the absence of any legally binding enforcement mechanism, individual cartel producers may find it advantageous to cheat on the agreements and engage in secret price concessions
a. true b. false