The Internet has made it possible to compare lots of prices without incurring a lot of cost. If Internet access is unequally distributed throughout the population one would expect
A) consumers with internet access to pay a higher price.
B) consumers without internet access to pay a lower price.
C) price discrimination against consumers without internet access.
D) firms to charge the same price to all consumers.
C
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In 2001, Pablo earned $200 per week at his job. In 2011, Pablo earned $240 per week. If the CPI in 2001 was 100 and the CPI in 2011 was 152, then
A) Pablo was better off in 2011 because his weekly wage was higher. B) the 2001 wage measured in 2011 dollars is $157.89. C) the 2011 wage measured in 2001 dollars is $157.89. D) the 2001 wage measured in 2011 dollars is $131.58. E) the 2001 wage measured in 2011 dollars is $100.
A student comments to his roommate that the only way he will be able to pass his final exams is to not sleep for the next three days. This statement suggests that
A) society should value good grades more highly than sleep because students can catch up on their sleep once final exams are over. B) there is a trade-off between studying and sleep. C) students are more concerned about good grades than good health. D) society should value sleep more highly than good grades.
The extended least squares assumptions are of interest, because
A) they will often hold in practice. B) if they hold, then OLS is consistent. C) they allow you to study additional theoretical properties of OLS. D) if they hold, we can no longer calculate confidence intervals.
Which of the following is true about rational expectations?
a. People form expectations on the basis of information about past as well as future actions of policy makers. b. Wage agreements do not reflect inflationary expectations if workers expect continued inflation c. Rational people cannot easily anticipate the effects of discretionary policy on the price level and output. d. The role of expectations is applicable in the context of monetary policy only. e. The effectiveness of a particular government policy is independent of people's expectations.