Which of the following will most likely be an unanticipated economic change?
What will be an ideal response?
Higher oil prices resulting form a revolution in an oil-exporting country.
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In deciding on how to spend their resources, consumers try to
A. maximize expenditures. B. choose the combination of goods that yield the highest level of personal satisfaction. C. choose the combination of goods that costs the least. D. maximize profit.
Suppose the following: (1 ) the wage rate rises, (2 ) the interest rate rises, (3 ) any change in AD is greater than any change in SRAS. Based on this information, in the short run Real GDP will __________ and the price level will __________
A) rise; rise B) fall; rise C) fall; fall D) rise; fall
Suppose Joe has a reliable two-year old Honda Civic that's in excellent condition and that he would be willing to sell for $13,000. Lauren, who is risk-neutral, is considering whether to buy Joe's car. She's willing to pay $14,000 for a two-year Honda Civic that is reliable and only $10,000 for one that's not reliable. Lauren cannot tell whether Joe's car is reliable, but she believes that only 20 percent of two-year old Hondas for sale in the market are reliable and that the other 80 percent are not reliable. To Lauren, Joe's car looks just like every other two-year Honda that's for sale. What's the most Lauren is willing to pay for Joe's car?
A. $14,000 B. $13,000 C. $10,000 D. $10,800
Which of the following is an activity of government that is not an activity of private firms?
A. Enforcing involuntary transactions. B. Paying equitable wages. C. Creating positive externalities. D. Pursuing economic efficiency.