To assess the benefit of a product never consumed, the brain bases its benefit valuation on:
A. chance.
B. past experiences with similar products.
C. the cost of the product.
D. The brain cannot value the benefit of a product never consumed.
Answer: B
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What is the main difference between a temporary and permanently negative supply shock?
A) The real interest rate immediately decreases after a temporary shock while it eventually increases after a permanent shock. B) Output increases right away after a temporary shock but the impact does not last whereas for a permanent shock output permanently decreases. C) A temporary shock will see a permanent increase in inflation while inflation will only rise temporarily after a permanent shock. D) all of the above E) none of the above
In the short-run macro model, a decrease in the money supply will
a. lower the interest rate, increase spending, and increase GDP b. lower the interest rate, reduce spending, and lower GDP c. raise the interest rate, increase spending, and increase GDP d. raise the interest rate, reduce spending, and lower GDP e. raise the interest rate, reduce spending, and increase GDP
Fabulous Farms operates in a perfectly competitive market. Which of the following is required for Fabulous Farms to both maximize profits and achieve allocative efficiency?
A. P = MC B. P > MC C. P < MC D. P = MC – MR
Average total cost equals:
A. total fixed cost plus total variable cost. B. average fixed cost minus average variable cost. C. average fixed cost plus average variable cost. D. total cost minus average cost.