The rational expectations school of thought argues that people form expectations based on:
a. all available information.
b. only on information they believe to be "insider" information.
c. their own instincts.
d. only past information and experience.
a
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A chain saw manufacturer can make its chain saws safer by adding a titanium chain guard to its products. Adding the titanium chain guard costs $35 per chain saw
The manufacturer estimates that this will prevent 10 injuries for every 5,000 chain saws sold and that, on average, each injury causes $15,000 of harm. The injury cost per chain saw is A) $3.00. B) $30.00. C) $37.50. D) $40.00.
All the following statements about the Federal Reserve are true EXCEPT the fact that it ________
A) is a public authority B) regulates a nation's depository institutions C) accepts checking deposits from the nation's residents D) controls the quantity of money
You decide to drive your car on a long road trip of 1,500 miles. The opportunity cost of driving your car:
A. is the amount of money spent on gas. B. is zero because the car is paid for. C. includes lost wages you could have earned instead of driving. D. the total expenses of the trip in the end.
In the long run, monopolistically competitive firms charge prices:
A. equal to the minimum of average total cost. B. equal to marginal cost. C. below marginal cost. D. above the minimum of average total cost.