What is the endowment effect?
A) the tendency of firms to use celebrities endowed with good looks to promote their products
B) the phenomenon that economic agents are endowed with different qualities and abilities so that trade among individuals increase efficiency
C) the tendency of people to be unwilling to sell something 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.
D) the tendency for economic agents with abundant resources to consume a proportionately greater quantity of goods and services
C
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The demand for U.S. dollars is derived from foreign demand for U.S. exports
a. True b. False Indicate whether the statement is true or false
The reserve ratio is 20 percent. The Fed buys $1 million in government securities from a bond dealer by transmitting the funds to the dealer's deposit account at Bank A. Bank A loans the maximum amount possible to a construction company, which buys materials from a lumber yard. The lumberyard deposits the construction company's check in Bank B. What is the maximum loan Bank A can now make and the maximum loan Bank B can now make?
A. Bank A: 0; Bank B: $640,000 B. Bank A: 0; Bank B: $800,000 C. Bank A: $800,000; Bank B: 0 D. Bank A: $800,000; Bank B: $640,000
In general, we would expect the marginal cost of pollution abatement to be
A. decreasing. B. increasing. C. zero. D. constant.
The labels for the axes of an aggregate supply curve should be:
A. Real domestic output for the vertical axis and price level for the horizontal axis B. Real domestic output for the horizontal axis and price level for the vertical axis C. Real employment for the vertical axis and price level for the horizontal axis D. Aggregate demand for the vertical axis and real national output for the horizontal axis