The observation that people tend to value something more highly when they own it than when they don't is called the
A) wealth effect.
B) endowment effect.
C) path-dependent effect.
D) endorsement effect.
Answer: B
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For any value of the MPC (marginal propensity to consume), the formula for the expenditure multiplier is
a. 1/(1 - MPC) b. 1/MPC c. 1/(MPC - 1) d. (1 + MPC)/MPC e. 1/(1 + MPC)
Which of the following statements concerning equilibrium in the long run is not true?
a. Most firms earn economic profits in the long run. b. The firm can vary its plant size in the long run. c. Economic profits are eliminated as new firms enter the industry in the long run. d. For firms in long-run equilibrium, P = MC = AC.
Suppose Eddie's demand curve for text messages is T = 150 - 500Pt, where T stands for the number of text messages and Pt represents the price of text messages. What is Eddie's consumer surplus if Pt = $0.10 per message?
A. $5 B. $10 C. $20 D. $50
Cradle-to-grave security is most common in ___________ countries.
A. Capitalist B. Communist C. Socialist D. Fascist