Which of the following assumptions is held by both the classical view and the new classical view?
A) rational expectations
B) flexible wages and prices
C) flexible wages and sticky prices
D) adaptive expectations
E) a and b
B
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The substitution effect of a real wage increase is observed when
A) the higher wage causes workers to take more leisure and work more hours. B) the higher wage causes workers to take more leisure and work fewer hours. C) leisure's higher opportunity cost causes workers to take less leisure and work more hours. D) leisure's higher opportunity cost causes workers to take more leisure and work fewer hours.
Studies at Cornell University revealed that chickens grow 2 percent larger when a red mitten is placed in their cage and Vivaldi is played in the coop. Resultant feed savings are estimated at $60 million a year. In the chicken market, the
a. demand curve shifts to the right. b. supply curve shifts to the right. c. price will rise. d. quantity sold will fall.
The following list contains factors that are related to the aggregate demand curve.1)Household expectations 2)Profit expectations 3)Degree of excess capacity 4)Personal income tax rates 5)Exchange rates 6)National income abroad 7)Government spending 8)Household wealth Refer to the above information. Investment spending would most likely be influenced by changes in:
A. 2 and 3. B. 1 and 8. C. 5 and 6. D. 1 and 4.
When people try to benefit from a public good without paying for it, we call it the:
A. free-rider problem. B. duopolists' dilemma. C. public goods problem. D. taxation problem.