Studies on consumer behavior have found that most people value fairness enough that they will refuse to participate in transactions they consider unfair, even if they are worse off as a result
How does this affect a firm's decision to raise prices in the event of a temporary increase in demand?
If the firm chooses to raise prices, consumers will consider this price increase unfair and might choose to buy elsewhere. This loss of consumer goodwill could lead to lower profits in the long run. It is rational for firms to forgo raising prices in the short run to keep customers happy. This can lead to increased profits in the long run.
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When housing prices decrease, household wealth ________, and consumption ________.
A. increases; increases B. decreases; decreases C. increases; decreases D. decreases; increases
Refer to Table 11.1. What is the value of the tax multiplier?
A) -0.67 B) -1.875 C) 2.33 D) 3
Another name for plurality voting is:
A. pair-wise majority voting. B. instant runoff voting. C. approval voting. D. first-past-the-post voting.
In Venezuela, the government attempted to control rising food prices by implementing price ceilings in the market. These price ceilings were set ________ the market prices, which resulted in ________ of food
A) above; surpluses B) above; shortages C) below; surpluses D) below; shortages