What are menu costs and why does high inflation increase menu costs?
Menu costs are the costs of changing prices. When inflation is higher, firms will change their prices more frequently.
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________ refers to a government's failure to repay its debt
A) Intolerance B) Distortion C) Seignorage D) Repudiation
Which of the following holds true?
A) When the Marginal Product (MP) is rising, Marginal cost (MC) is rising; and when MP is falling, MC is falling. B) When MP is rising, MC is falling, and when MP is falling, MC is rising. C) When MP is rising, MC is constant, and when MP is falling, MC is negative. D) There is no relationship between MP and MC.
An economist at the University of Alaska at Anchorage has been asked to explain why the price of Alaskan crude oil has fallen recently. In order to assemble a scholarly answer, the professor should take which steps? a. Develop a hypothesis, test the proposition by engaging in empirical analysis, and examine the data to see if it fits with the facts. b. Gather data on crude oil prices and
seemingly unrelated variables in order to look for associations, then formulate a hypothesis based on those unexpected associations. c. Ask people in Alaska why they are not purchasing oil. d. None of the above. The oil industry is controlled by a cartel; therefore price changes in the industry cannot be explained using economic theories.
A family has decided to go away for the summer. The monthly mortgage payment on the family's house is $1,000 . Water, electricity, natural gas, and maintenance bills, to be paid by the family, will be $700 per month if the house is occupied and zero otherwise. If the family wishes to minimize losses from being away, it should rent the house for as much as the market will bear, as long as the
monthly rent is above which of the following? (Assume wear and tear to be the same whether or not the house is occupied.) a. $300 b. $700 c. $1,000 d. $1,700