In their surveys of consumers, Daniel Kahneman, Jack Knetsch and Richard Thaler found that
A) most people considered it unfair for firms to raise their prices because of an increase in their costs, but fair to raise their prices after an increase in demand.
B) most people considered any increase in price to be unfair as it led to an increase in profits.
C) most people believed that low-income people were hurt most by increases in prices.
D) most people considered an increase in price by firms following an increase in their costs to be fair but believed it was unfair for firms to raise their prices because of an increase in demand.
Answer: D
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Consider how the United States balance of payments accounts are affected when U.S. banks forgive two billion in debt owed to them by the government of Argentina
What will be an ideal response?
Hilda's Hair Hysteria earned $3,750 in total revenue last month when it sold 125 haircuts. This month it earned $3,600 in total revenue when it sold 90 haircuts. The price elasticity of demand for Hilda's Hair Hysteria is
a. 0.33. b. 0.88. c. 1.14. d. 7.98.
Use the following diagrams to answer the next question.
Assume the economy is on aggregate demand AD4. The Fed should attempt to raise investment by enough to shift aggregate demand from AD4 to ________.
A. AD3 and then to AD2 B. AD3 and then to AD1 C. AD2 and then to AD3 D. AD1 and then to AD2
To decrease output the government could
A. increase government spending and encourage immigration. B. decrease government spending and discourage immigration. C. increase government spending and discourage technological advancement. D. decrease government spending and encourage technological advancement.