If the consumption function is C = 25 + 0.9y and income increases by $100, then autonomous consumption spending will be
A) $10. B) $25. C) $90. D) $115.
B
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If a strategy is a best response, then
A) it will never be played. B) it will never be part of a Nash equilibrium. C) A and B are correct. D) it could be part of a Nash equilibrium.
Suppose financial market participants expect short-term rates in the future to be less than current short-term interest rates. Given this information, we would expect
A) an upward sloping yield curve. B) a downward sloping yield curve. C) an upward shifting yield curve. D) a downward shifting yield curve. E) a horizontal yield curve.
What is shown on a firm's income statement?
A) costs B) profits C) revenues D) All of these are shown on a firm's income statement.
Molly received an autographed poster of David Hasselhoff for her 21st birthday
Her friend Helga offered her $50 for the poster, but Molly refused to sell the poster even though she knows she would never pay that much to replace it if it was ever damaged or destroyed. Explain this inconsistency in Molly's behavior.