Which of the following is not a cost of inflation identified by economists?
a. menu costs associated with more frequent adjustment of prices
b. confusion and inconvenience resulting from a changing value of the unit of account
c. reduced price flexibility
d. arbitrary redistributions of wealth associated with dollar-denominated debts
c
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Opportunity costs are
A) always marginal costs. B) never marginal costs. C) not related to marginal costs. D) sometimes marginal costs. E) sunk costs.
The equation of exchange states:
a. MV = PQ. b. MP = VQ. c. MP = V/Q. d. V = M/PQ.
Since people get sick at all hours of the day, some nurses who work in hospitals are required to work the night shift. In most cases, the nurses who work the night shift earn a higher hourly wage for the same work as the nurses who work the day shift. This difference in pay is referred to as a
a. discriminatory wage practice. b. compensating differential. c. wage inequity. d. a market inefficiency.
Fred just purchased an expensive new refrigerator and is considering purchasing the overpriced warranty. In making his decision on the warranty, Fred ignores better ways that his money could be spent, including paying off high-interest credit card debt. According to prospect theory, the process that leads Fred to ignore the debt and buy the overpriced warranty is
A) framing bias. B) anchoring. C) mental accounting. D) confirmation bias.