Why are rules of thumb beneficial to consumers?
a. They provide consumers with the most optimal solution.
b. They prevent consumers from falling prey to logical fallacies.
c. They save consumers time and mental processing power.
d. They eliminate the need to maximize marginal utility.
c. They save consumers time and mental processing power.
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Mortgage lenders often resell mortgages in secondary markets. How might this make lenders act differently than if they intended to hold the mortgages themselves?
What will be an ideal response?
Consumers receive more consumers' surplus when __________
A) tariffs exist. B) tariffs and quotas do not exist. C) quotas exist. D) a and c
The Chicago City Council considered a "living wage" ordinance that would raise the minimum wage in Chicago to about $10 an hour. How did most economists probably view this legislation?
A. The city will benefit because more people will move to Chicago. B. All people looking for work will be helped, but consumers will be hurt. C. It is a proposal that is meant to help everyone. D. Workers who can find work will be helped, but some people will lose their jobs.
In a contestable market,
A. There are economies of scale that heighten competition. B. An imperfectly competitive industry does not face any potential competition when profits increase. C. Many firms compete in producing a standardized product. D. Barriers to entry and long-run economic profits are low.