As a result of habit formation, people spend more today if
A. they spent more in the past.
B. they have no loan or debt in the past.
C. they spent less in the past.
D. they never had any income in the past.
Answer: A
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If the market price of oats is $2.5 per bushel and a farmer decides to sell at $2.8 per bushel, he is likely to sell:
a. more than 5 bushels per day. b. more than 10 bushels per day. c. less than 5 bushels per day. d. 10 bushels per day. e. nothing.
In the bond market, the assigning of a risk premium is a tool designed to address the problem of:
A. information asymmetry. B. moral hazard. C. adverse selection. D. the free-rider.
Refer to Figure 5-2. The true marginal cost of the last unit produced is represented by the price
A) Pa. B) Pb. C) Pc. D) Pf.
If the quantity of goods and services produced in the economy decreases,
A) real GDP would certainly increase. B) nominal GDP would certainly increase. C) it may be possible for nominal GDP to increase. D) it may be possible for real GDP to increase.