Which of the following is a common mistake made by consumers?
A) taking into account the implicit costs of an activity
B) ignoring sunk costs
C) being overly optimistic about their future behavior
D) being overly pessimistic about their future behavior
Answer: C
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The rate of unemployment when the economy is fully employed is called the
A. full-employment rate of unemployment. B. natural rate of unemployment. C. frictional rate of unemployment. D. structural rate of unemployment.
In the figure above, the shift in the supply curve for U.S. dollars from S0 to S2 could occur when
A) the U.S. interest rate falls. B) the expected future exchange rate rises. C) the U.S. interest rate differential increases. D) the current exchange rate falls.
The figure above shows Ilene's budget line. The price of a can of cat food is $2. If the price of a can of cat food rises, her budget line will
A) rotate inward toward the origin. B) rotate outward away from the origin. C) shift leftward in a parallel manner. D) shift rightward in a parallel manner.
What are the information costs associated with forward contracts?
What will be an ideal response?