Suppose you value a special watch at $100 . You purchase it for $75 . On your way home from class one day, you lose the watch. The store is still selling the same watch, but the price has risen to $85 . Assume that losing the watch has not altered how you value it. What should you do?
a. Pay the $85 to buy the watch.
b. Wait to see if the watch goes on sale. If the price drops to $75 or less, buy the watch.
c. Wait to see if the watch goes on sale. If the price drops to $25 or less, buy the watch.
d. Do not buy the watch.
a
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A technological breakthroughs in the production of computers creates a __________ and causes the price of computers to __________.
a. leftward shift of supply, rise b. rightward shift of supply, fall c. rightward shift of demand, rise Incorrect. Please review Top Ten Concept # 3. d. rightward shift of supply, rise e. leftward shift of demand, rise
Risk aversion:
A. is an aspect of an individual's preferences. B. is the same for everyone. C. is an unusual type of preference. D. All of these statements are true.
Refer to the data provided in Table 11.1 below to answer the following question(s).
Table 11.1 
Refer to Table 11.1. If the interest rate is 5%, Nashbar Bicycle should
A. fund only the employee fitness center. B. not fund any of the projects. C. fund all of the projects. D. fund all of the projects except for the employee fitness center.
Refer to the given data. If the Fed reduced the reserve requirement from 20 percent to 16 percent, excess reserves in the commercial banking system would increase by _____ and the monetary multiplier would rise to ____.
Answer the question on the basis of the following consolidated balance sheet of the
commercial banking system. Assume that the reserve requirement is 20 percent. All figures
are in billions and each question should be answered independently of changes specified in all
preceding ones.
A. $10 billion; 5
B. $40 billion; 6.25
C. $10 billion; 10
D. $40 billion; 12.5