One reason why the price elasticity of demand for cigarettes is large for young smokers is that
a. they have large discretionary incomes
b. the price of cigarettes increased recently
c. they are no longer permitted to smoke in public
d. cigarette advertising on television has been banned
e. the proportion of income a young smoker spends on cigarettes is usually quite large
E
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Which is not one of the four basic questions used by economists to break down problems?
A. What do others think? B. What are the trade-offs? C. How will others respond? D. Why isn't everyone already doing it?
Which of the following is a probable consequence of the presence of accounting rules that allow firms to hide the financial impact of actions that would harm investors?
a. Investors may be able to enforce market efficiency. b. The WTO will disenfranchise the country that allows this to happen. c. Investors will immediately organize a speculative attack and the price of stocks will inflate. d. The balance-of-payments deficit will increase, leading the economy into a debt trap. e. Investors may not be able to adequately judge when the risk of investing in a firm rises.
Why is persistent unemployment a possibility in the Keynesian model but NOT in the classical model?
A. The Keynesian model assumes that nominal wages are inflexible downward. B. The Keynesian model assumes that people work for motives other than those of earning an income for themselves and supporting a family. C. The Keynesian model assumes that workers can lose their jobs to foreign competition during economic downturns. D. The Keynesian model assumes that the level of real GDP is inflexible.
Consider the following game. You pick a card from a standard 52-card deck and each time you select an ace, you get $520. For all other cards you must pay $26. This game is not a fair bet.
Answer the following statement true (T) or false (F)