Standard utility maximizing theory does not take into account that humans have ______
a. budget constraints
b. bounded rationality
c. marginal utility
d. product preferences
b. bounded rationality
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Suppose the target exchange rate set by the Fed is 100 guilders per dollar. If the demand for dollars temporarily decreases, to maintain the target exchange rate, the Fed can
A) sell dollars. B) buy dollars. C) increase U.S. exports. D) increase U.S. imports.
When a firm leaves a perfectly competitive industry,
A. the individual demand curves facing remaining firms shift toward the point of minimum average cost in the long run. B. short-run industry equilibrium is reestablished at a new point along the original short-run industry supply curve. C. the short-run industry supply curve shifts to the right. D. at the new long-run equilibrium, the remaining firms in the industry will each receive a higher profit.
After a binding price floor becomes effective, a
a. smaller quantity of the good is exchanged. b. a larger quantity of the good is demanded. c. a smaller quantity of the good is supplied. d. All of the above are correct.
In the long run, if the prices of goods and services paid by consumers increase the long-run aggregate:
A. supply will decrease. B. supply will stay the same. C. supply will increase. D. demand will increase.