Hoe does etiquette help in transaction of goods between two parties?
Etiquette is an economic institution that can greatly ease the process by which a transaction moves from proposal to commitment. Parties from different cultures may have particular problems distinguishing behavior that is acceptable from behavior that is not. If an American and an Asian are unaware of each other's etiquette, a valuable transaction could be lost.
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If you accept the rational expectations hypothesis as accurate, what would you tell monetary policy makers who ask you how to more effectively manage the economy?
A) Individuals do understand how monetary policy works, so consistency and predictability are the keys to effective policy making. B) Only unanticipated policies will be effective once individuals understand how monetary policy works. C) Consumers do not understand the workings of monetary policy, so discretionary and nondiscretionary policies are equally effective. D) Individuals base their economic expectations solely on current information, so repeating policy decisions that have worked in the past is the most effective path to take.
A price-discriminating monopoly is a monopoly that
A) sells its output at a single price to all of its customers. B) sells different units of a good or service at different prices. C) has control over the resources used to produce the product. D) has a license to sell the product. E) illegally charges different customers different prices for the good it produces.
The "marginal rate of substitution" between two goods is measured by:
A) the ratio of the market prices of the two goods. B) the number of units of a good consumed divided by the market price of the other good. C) the number of units of one good a consumer would give up to consume one more unit of another good, while holding total utility constant. D) the consumer's budget constraint divided by the price of each good.
Which country has the highest level of income inequality?
a. Brazil b. Russia c. China d. India