The tendency of people to be unwilling to sell a good they already own even if they are offered a price that is greater than the price they would be willing to pay to buy the good if they didn't already own it.
What will be an ideal response?
Endowment effect
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During October and November 2008, gasoline prices were falling dramatically making travel by car less expensive but air travel prices were as high as ever
If travel by car is less expensive, and income remains the same, describe the substitution and income effects that occur for travelling by car. A) If travelling by car is a normal good, the substitution effect would cause an increase and the income effect would cause a decrease in travelling by car. B) If travelling by car is a normal good, both the substitution and income effects would be cause an increase in travelling by car. C) If travelling by car is a normal good, the substitution effect would cause a decrease and the income effect would cause an increase in travelling by car. D) If travelling by car is a normal good, both the substitution and income effects would cause a decrease in travelling by car.
Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia. What will be the likely effect on the market for sparkling wine in Vinyardia?
A) Quantity demanded will decrease, quantity supplied will increase, and a surplus will result. B) Quantity demanded will increase, quantity supplied will decrease, and a shortage will result. C) Quantity demanded will increase, quantity supplied will decrease, and a surplus will result. D) Quantity demanded will decrease, quantity supplied will increase, and a shortage will result.
What type of person would you expect to have the shortest indenture?
a. 13 year-old male craftsman who went to New England b. 22 year-old male laborer who went to the West Indies c. 20 year-old male farm worker who went to the South d. 21 year-old male carpenter who worked in the West Indies
In differentiating between the short-run and long-run elasticities for the same good, when economists talk about short-run elasticities,
a. they cannot distinguish between the two types b. there is no differentiation if it's the same good c. they are the same as long-run elasticities for the same good d. they are usually higher than long-run elasticities e. they are usually lower than long-run elasticities