Which of the following is most clearly consistent with the basic postulate of economics regarding the reaction of people to a change in incentives
a. Farmers produce fewer bushels of wheat in response to an increase in the price of wheat.
b. People will buy more milk at a price of $2 per gallon than at $1 per gallon.
c. People will buy less gas if the price of gas increases by $.20 per gallon.
d. People will consume more beef if the price increases from $1 to $2 per pound.
C
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Financial crises generally develop along two basic paths
A) mismanagement of financial liberalization/globalization and severe fiscal imbalances. B) stock market declines and severe fiscal imbalances. C) mismanagement of financial liberalization/globalization and stock market declines. D) stock market declines and unanticipated declines in the value of the domestic currency.
How does the Fed decide which monetary measure should be the focus of its monetary policy choices?
A) The Fed would like to track a monetary measure that is most closely related to the market interest rate. B) The Fed would like to track a monetary measure that is most closely related to the quantity of money demanded by economic agents. C) The Fed would like to track a monetary measure that is most closely related to the level of real GDP and the price level. D) The Fed would like to track a monetary measure that is most closely related to government spending.
Refer to the normal-form game of bargaining shown below.Union?Management??$0$250$500?$0($0, $0)($0, $250)($0, $500)?$250($250, $0)($250, $250)(-$10, -$10)?$500($500, $0)(-$10, -$10)(-$10, -$10)Suppose that management and the union are bargaining over how much of a $500 surplus to give to the union. It is assumed that the surplus can only be split into $250 increments. Furthermore, negotiations are set up such that management and the union must simultaneously and independently write down the amount of surplus to allocate to the union. The payoff structure to this one-shot bargaining game is listed in Figure 10-16. The number of inefficient outcomes resulting from the bargaining game is:
A. 3. B. 8. C. 5. D. 6.
If the U.S. population were split into quintiles based on income, with the lowest quintile representing the poorest 20 percent, then those who earned the median income for the United States would be in the:
A. fourth quintile. B. fifth quintile. C. third quintile. D. second quintile.