The rule of rational choice holds that people will alter their behavior if ______.
a. expected marginal benefits outweigh expected marginal costs
b. they can afford both the money costs and the non-money costs
c. comparative advantages are greater than absolute advantages
d. changes to their course of action are slow and incremental
a. expected marginal benefits outweigh expected marginal costs
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Risk premiums on corporate bonds tend to ________ during business cycle expansions and ________ during recessions, everything else held constant
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Compared to perfect competition, a monopoly will produce ________ output, and charge a ________ price
A) more; higher B) more; lower C) less; higher D) less; lower
Which of the following is true about inflation?
a. Inflation promotes social harmony by uniting people against the government. b. Inflation is more damaging if it is anticipated. c. Accurate anticipation of inflation is possible for everyone who is well informed about economic events. d. Those who lend money at a rate below the rate of inflation suffer economic losses. e. If people accurately anticipate inflation, their actions will prevent it.
If customers are racist but employers are not, then employment discrimination will be
a. equally profitable as nondiscrimination. b. more profitable than nondiscrimination. c. easier to eliminate than if employers were racist but customers were not. d. less profitable than nondiscrimination.