If economics is correct in its assumption that people are rational, why then would anyone choose to smoke cigarettes?
Even though the harmful effects of cigarette smoking are documented, more than 20 percent of the U.S. adult population continues to smoke. The economic model of rational choice suggests that individuals weigh the marginal benefit of smoking an additional cigarette (the pleasure obtained) against the marginal costs (the pecuniary cost, the price of the cigarette, and the risk of being afflicted by smoking-related diseases, discounted by the probability). Since the likelihood of getting a smoking-related disease increases with age, it is not surprising that more people elect to give up the habit as they get older.
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To change the rate of growth of the money supply, the Fed can do all but which one of the following?
A) Shift the demand for money curve by changing the interest rate. B) Engage in open market operations. C) Change the discount rate. D) Change the required reserve ratio.
In the market for reserves, if the federal funds rate is above the interest rate paid on excess reserves, an open market sale ________ the ________ of reserves, causing the federal funds rate to increase, everything else held constant
A) increases; supply B) increases; demand C) decreases; supply D) decreases; demand
Using Figure 1.4 and starting at PP1, an increase in the capacity to produce can be represented by a movement from point
A. A to point C. B. C to point E. C. D to point E. D. A to point B.
Suppose a cereal firm, Nabisco, merges with both a wheat firm and milling firm. This is an example of a
A) vertical merger. B) horizontal merger. C) parallel merger. D) diagonal merger.