Which of the following statements represents a correct and sequentially accurate economic explanation?
A) Goods X and Y are substitutes. The price of X falls, the quantity demanded of X rises, and the demand for Y rises.
B) Goods X and Y are substitutes. The price of X rises, the demand for X falls, and the demand for Y rises.
C) Goods X and Y are substitutes. The price of X falls, the demand for X rises, and the quantity demanded of Y rises.
D) Goods X and Y are substitutes. The price of X falls, the quantity demanded of X rises, and the demand for Y falls.
E) Goods X and Y are complements. The price of X falls, the quantity demanded of X rises, and the demand for Y falls.
D
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Rational inattention refers to ________
A) the risk a firm runs when they do not pay attention to their customers B) firms making infrequent price decisions because of the time and effort those decision require C) the cost to the firm of losing sales from alienating customers D) all of the above E) none of the above
Which economic theory argues that changes in velocity are predictable and the crowding-out effect is substantial?
a. Classical theory. b. Keynesian theory. c. Monetarist theory. d. Marxist theory.
When competition is present and private ownership rights are clearly defined and securely enforced,
a. production and trade are encouraged and plunder (taking from others) is discouraged. b. people get ahead by helping others in exchange for income. c. employers will have to provide prospective employees with at least as good a deal as they could get elsewhere. d. all of the above are correct.
June owns a farm, and has a right to spray it with pesticides. Unfortunately, the pesticides kill her neighbor’s bees and cost him $5,000 per year. June can use a spray that does not harm the bees for a cost of $2,000 more per year. What can June’s neighbor do that would demonstrate the Coase theorem?
a. Sue June for the $5,000 in damages. b. Offer June $3,500 to spray the bee-friendly spray. c. Find a way to do $5,000 damage to June’s farm. d. Offer to pay $1,000 toward the bee-friendly spray.