Inflation increases uncertainty in the markets because:
A. consumers must put more effort into shopping to find the best price.
B. it is more difficult to stay aware of how one product compares in cost to another.
C. sellers raise the prices of their products very gradually and predictably.
Answer:
A. consumers must put more effort into shopping to find the best price.
B. it is more difficult to stay aware of how one product compares in cost to another.
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A credible promise is:
A. in the promiser's interest to keep. B. possible to keep. C. legally enforceable. D. made by a honest person.
One reason individuals are willing to pay for information in uncertain situations is that information
A) can reduce uncertainty. B) is a way to diversify. C) is a method of insurance. D) is a method of self-insurance. E) always reduces the difference between the probabilities of possible outcomes.
Which of the following is an example of an externality?
a. cigarette smoke that permeates an entire restaurant b. a flu shot that prevents a student from transmitting the virus to her roommate c. a beautiful flower garden outside of the local post office d. All of the above are correct.
In the game depicted below, firms 1 and 2 must independently decide whether to charge high or low prices.Firm 1Firm 2??High PriceLow Price?High Price(10,10)(5,-5)?Low Price(-5,5)(0,0)If player 1 charges a high price when player 2 charges a low price, then player 2 earns:
A. ?5. B. 0. C. 5. D. 10.