Suppose Paul just saw a car accident while driving home from work. According to the availability heuristic, this is likely to make Paul think that:
A. he is extremely lucky.
B. car accidents are more common than they really are.
C. car accidents are rare.
D. people only get into car accidents if they are bad drivers.
Answer: B
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If monetary equilibrium were to occur
A) inflation would not occur. B) deflation would not occur. C) the price level would be stable. D) all of the above would be true. E) none of the above would be true.
Two inputs ______ when they must be combined in a fixed ratio.
A. are perfect substitutes B. are perfect complements C. represent Cobb-Douglas technology D. are fixed inputs
Most theories in economics are based on how one variable affects another variable.
Answer the following statement true (T) or false (F)
In a duopoly, if one firm increases its price, then the other firm can:
A. Keep its price constant and thus increase its market share B. Keep its price constant and thus decrease its market share C. Increase its price and thus increase its market share D. Decrease its price and thus decrease its market share