According the Lucas' misperception model, when prices unexpectedly rise, suppliers infer that their relative prices have _____, which induces them to _____ output
a. decreased; increase.
b. increased; decrese.
c. decreased; decrease.
d. increased; increase.
D
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A family's summer house on Cape Cod pays a return in the form of
A) interest rate. B) capital gains. C) the pleasure of vacations at the beach. D) stock options. E) capital gains and pleasure.
Ten individuals have $100 and identical preferences for picnics, p, and kayak trips, k, where U(p, k) = k0.5p0.5. The price of picnics is $5 and the price per kayak trip is $ 10
What is the shortage/surplus in the market when the supply of picnics totals 120? A) There is a surplus of 20. B) There is a shortage of 20. C) The market is in equilibrium. Therefore, there is no surplus/shortage. D) There is not enough information to answer this question.
A production possibilities curve determines the price at which goods trade
Indicate whether the statement is true or false
A situation in which there is a reduction in quantity supplied to zero when there is the slightest decrease in price is
A. perfectly elastic demand. B. perfectly elastic supply. C. perfectly inelastic demand. D. perfectly inelastic supply.