Carla is deciding whether to go to the movies this afternoon. Behavioral economists predict Carla likely will:
A. have a difficult time accurately valuing the benefit of the movie.
B. have a hard time accurately valuing her opportunity cost of the movie.
C. over-value her opportunity cost.
D. All of these are true.
B. have a hard time accurately valuing her opportunity cost of the movie.
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An example of money is
A) a checking account balance. B) a dollar bill. C) a traveler's check. D) all of the above.
Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $3, what changes in the market would result in an economically efficient output?
A) The quantity supplied would decrease, the quantity demanded would increase, and the equilibrium price would decrease. B) The price would decrease, quantity demanded would increase, and quantity supplied would decrease. C) The price would decrease, the quantity supplied would increase, and the quantity demanded would decrease. D) The price would decrease, the demand would increase, and the supply would decrease.
Suppose the real money demand function is Md/P = 2400 + 0.2Y - 10,000 (r + ?e). Assume M = 5000, P = 2.0, and ?e = .03. If Y were to increase from 4000 to 5000, then the real interest rate would increase by how many percentage points?
A) 2 B) 4 C) 5 D) 7
In common value auctions
a. Every bidder know the value of the object being sold b. Each bidder makes the same estimate of the value of the good c. Bidders do not know the estimates of the others d. The true value of the item differs across bidders