Grace just got her first cell phone, an iPhone, for graduation. She tosses her iTouch in a drawer and never touches it again, even though she could easily sell it for $75 on Craigslist. Grace's choice is ___________ because ________________.
A. rational; she weighs the $200 she paid for the iTouch and the $75 she could sell it for now
B. irrational; she weighs the $200 she paid for the iTouch and the $75 she could sell it for now
C. rational; she would not pay $75 to buy the iTouch today
D. irrational; she would not pay $75 to buy the iTouch today
D. irrational; she would not pay $75 to buy the iTouch today
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In response to the destructive bank panics of the Great Depression, future bank panics are designed to be prevented by
A) establishing a fractional reserve system of banking. B) increasing the required reserve ratio to 100%. C) the establishment of the Federal Deposit Insurance Corporation. D) the Federal Reserve System conducting open market operations. E) the Federal Reserve System acting as a lender of last resort.
A side effect of an action that affects the well-being of third parties is
A. a marginal cost. B. a marginal private benefit. C. an externality. D. a and b E. all of the above
Personal income and property taxes paid by individuals are not included in the income approach of gross domestic product calculation
a. True b. False Indicate whether the statement is true or false
Thomas Edison once said that he began making real profit on light bulbs when he dumped his surplus on the European market at less than the "cost of production." From this we can deduce Edison
a. did not want to maximize profit. b. understood the difference between marginal and average cost. c. had a different definition of the term "profit." d. did not understand the difference between fixed and variable cost.