New Keynesian economists have examined whether real-world prices are, in fact, sticky. In one study of 38 magazines, Stephen Cecchetti found
a. that price rigidity was nonexistent with respect to magazines at newsstands.
b. considerable rigidity with respect to the newsstand prices of magazines.
c. that most of the 38 magazines in the study had price changes at least once a year.
d. that the Readers Digest price was changed 15 times between 1950 and 1980.
B
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In 1999, the Eurozone was:
A) formed by all European countries to reduce tariffs. B) formed by 11 countries to adopt a new currency. C) formed by 21 countries to allow labor migration between countries. D) renamed the World Trade Organization.
A friend says, "I really, really need a new car." As an economist, you're thinking
A) Right! Everyone needs a new car. B) This is an example of how objectively undefinable needs are. Many would argue that this friend could get along just fine with a reliable used car. C) If this friend says she needs a new car, then we must all agree that a new car is a need and not just a want. D) that a new car can only be considered a need if at least 51% of the public agrees.
The figure above shows the market for milk. If 100 gallons of milk a day are available, the ________ price that consumers are willing to pay for the last gallon is ________
A) maximum; $2.50 B) minimum; $3.00 C) maximum; $4.00 D) minimum; $4.00
By focusing the customers on the price of a product, you make
a. The demand for the product more inelastic b. The customers less price sensitive to the product c. Both A & B d. None of the above