Martha routinely has her prescriptions filled at her local SVC pharmacy. Each time that Martha goes to pick up a prescription, there is some problem and Martha has to return to the pharmacy later to get the prescription. Martha finds these return trips very annoying and time-consuming, but continues to request that her doctor send her prescriptions to this pharmacy even though there are several
other options in her town. Which of the following is correct?
a. Economists would say that Martha is behaving rationally.
b. Martha's behavior appears to exhibit inertia.
c. Martha's behavior is inconsistent over time.
d. Martha gives too much weight to a small number of vivid observations.
b
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In the Keynesian model in the short run, a decrease in the money supply will cause
A) a decrease in output and an increase in the real interest rate. B) an increase in the real interest rate but no change in output. C) a decrease in the real interest rate and a decrease in output. D) no change in either the real interest rate or output.
Which of the following statements applies to the classical system?
a. There is money wage inflexibility since full employment already existed b. A perfectly flexible money wage is not always a requirement for full employment c. Full employment was easily explained with downward money wage rigidity d. An imperfect market structure is requirement for full employment e. none of the above
If a tax takes a constant fraction of income as income rises, it is
a. regressive. b. proportional. c. progressive. d. based on the ability-to-pay principle.
It is costly to purchase a new car every two or three years because
What will be an ideal response?