The Jones family is going to Disney World and has set a budget of $2000 for visiting the theme park and hotel accommodations. Their original plan was to spend three days at the park and two nights in the hotel. Mrs. Jones unexpectedly listens to a timeshare sales pitch and she is paid $400 for enduring the ordeal. The family decides to spend an extra day at the park and two extra nights in the
hotel. For the Jones family, we can be certain that
a. hotels nights are an inferior good
b. their budget line has shifted to the left
c. theme parks days are an inferior good
d. hotel nights are a normal good
e. their budget line has changed its slope
D
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The producer price index measures:
A) the prices consumers pay for final goods and services. B) the prices firms pay for crude and intermediate materials as well as finished goods. C) the prices the government pays for final goods and services. D) none of the above.
Someone is considered to exhibit risk-seeking behavior if he:
A. has a high willingness to take on situations with risk. B. has a low willingness to take on situations with risk. C. will only participate in high-risk situations. D. will always choose the riskier venture when given two choices.
An externality is:
a. always a benefit to the recipient. b. always a detriment to the recipient. c. an activity that occurs in a business which is unknown to management. d. unintended benefits or costs imposed on third parties as a result of economic activity. e. an act, caused by a firm located in this country, which has an effect on a person in a foreign country.
Ordinary commercial banks can expand the supply of money by
a. printing up currency when they need it. b. buying and selling government bonds to the general public. c. using a portion of their deposits to extend additional loans. d. reducing their vault cash and increasing their deposits with the Fed.