Because of a late night out with friends, Ayana decided to sleep in rather than attend her 8 a.m. economics class. According to economic analysis, her choice was
a. irrational, because economic analysis suggests you should always attend classes that you have already paid for.
b. irrational, because oversleeping is not in Ayana's self-interest.
c. rational only if Ayana has not missed any other classes.
d. rational if Ayana values sleep more highly than the benefit she expects to receive from attending the class.
D
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Which of the following could result in a recession?
A) a rise in the price of oil B) an increase in investment C) a tax cut D) an increase in the quantity of money E) an increase in government expenditures on goods and services
Which of the following statements is true regarding the differences between economic and accounting costs?
A) Accounting costs include all implicit and explicit costs. B) Economic costs include implied costs only. C) Accountants consider only implicit costs when calculating costs. D) Accounting costs include only explicit costs.
Lawrence’s country has had three different governments in the last two years. Lawrence knows several people who had their property seized without payment when the new government took over. People are no longer starting businesses or buying buildings because they have no way to guarantee that they will still own them tomorrow. What is the likely result of the situation in Lawrence’s country?
a. The incentive to invest is high. b. The private sector will step in to increase growth. c. The country will have a low rate of economic growth. d. The country will have a high rate of output per capita.
In the long run, when the Fed increases the quantity of money, the
A) price level falls. B) nominal interest rate falls. C) price level rises. D) real interest rate rises. E) demand for money decreases.