Many people donate to charity and leave tips to servers in restaurants even when they will never visit the restaurant again. Economists consider this type of behavior to be
a. irrational because these actions make people worse off financially.
b. rational because it shows that people value fairness even when this behavior makes people worse off financially.
c. rational only if other people observe this behavior.
d. All of the above are consistent with the general view of fairness
b. rational because it shows that people value fairness even when this behavior makes people worse off financially.
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Monopolies and oligopolies both erect barriers to entry through the use of
A) price cutting. B) patents. C) franchising. D) advertising.
If the demand decreases in a perfectly competitive market, firms will likely:
A. exit the market in hopes of capturing profits elsewhere. B. experience negative profits in the short run. C. experience zero profits in the long run. D. All of these are true.
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What will be an ideal response?
Most economists believe that in the short run
a. real and nominal variables are determined independently and that money cannot move real GDP away from its long-run trend. b. real and nominal variables are determined independently but that money can temporarily move real GDP away from its long-run trend. c. real and nominal variables are highly intertwined but that money cannot move real GDP away from its long-run trend. d. real and nominal variables are highly intertwined and that money can temporarily move real GDP away from its long-run trend.