List and explain the different costs of inflation to a society
The costs of inflation to a society are listed under three categories: shoe-leather costs, menu costs, and unit-of-account Costs. Shoe-leather costs refer to the increased costs of transactions caused by inflation. (Elaborate; a larger number and greater frequency of transactions as people hurry to convert money that is rapidly decreasing in value into goods and services.) Menu costs refer to the costs of changing published prices due to inflation. Unit-of-account costs refer to the costs resulting from the way in which inflation makes money a less reliable unit of measurement.
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Tobin's q theory suggests that monetary policy may affect investment spending through its impact on
A) stock prices. B) interest rates. C) bond prices. D) cash flow.
If at the current level of product-specific service, consumers' value at $60 and the cost of retailers to provide the services is $60, which of the following is true?
A) the profit-maximizing level of profit-maximizing services is less than the current level B) the profit-maximizing level of profit-maximizing services is greater than the current level C) the profit-maximizing level of profit-maximizing services is exactly double the current level D) the profit-maximizing amount of product-specific services is being offered.
The segmenting of customers into several small groups such as household, institutional, commercial, and industrial users, and establishing a different rate schedule for each group is known as:
a. first-degree price discrimination b. market penetration c. third-degree price discrimination d. second-degree price discrimination e. none of the above
Return to the case of Jan, the hyperbolic discounter from the previous question. Suppose she can sign a contract that requires her to give up money equivalent to a loss of X utils if she does not undertake the action. Assume she does not behave consistent with her plans without this contract. How high would the contractual value of X have to be to prevent her inconsistency?
a. C – B/2. b. B. c. C. d. B + C.