Martha used to pay for her expenses with her own hard-earned money. She always tried to spend as little as she could. However, she started spending more when she received a scholarship . This behavior is an example of ________

A) moral hazard
B) a pecuniary externality
C) the free-rider problem
D) the paradox of thrift


A

Economics

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Refer to Figure 10-8. If the price of biscotti is $1.50 and the price of a cappuccino is $3.00, what is the slope of the budget constraint?

A) -(3.00 - 1.50 )/(3.00 + 1.50 ) = -1/3 B) -2 C) -1/2 D) The slope cannot be determined without the value of income.

Economics

The New Keynesian model, is Keynesian in that ________

A) it assumes wages and prices are sticky B) changes in the money supply are taken to be the single most important influence on business movements C) the velocity of money is a constant D) expectations are assumed to be rational

Economics

The initial stage of the procedure in which a union and an employer negotiate over a contract is known as

a. featherbedding. b. collective bargaining. c. mediation. d. arbitration.

Economics

What is the economic reasoning behind the proposal to legalize drugs?

a. Legal drugs will greatly increase the supply, which will reduce the price Americans pay to foreign producers of the drugs. b. All forms of government restrictions on behavior are immoral, and ought to be removed. c. Legal drugs will be much cheaper than illegal drugs, which will reduce incentive for crime to obtain money for drugs and to protect drug "businesses." d. Legal drugs will be more expensive than illegal drugs, and the market system will encourage more production, thus lowering the price. e. Dealing with supply is always easier than dealing with demand, and legalization accomplishes that.

Economics