Notice the situation that results when the price of coffee is $2 a pound. Which of the following would establish equilibrium?
a. Keep the price the same; increase the quantity supplied to 6,000 pounds.
b. Increase the price to $4; keep the quantity supplied the same.
c. Decrease the price to $1; decrease the quantity supplied to 2,000 pounds.
d. Increase the price to $3; increase the quantity supplied to 5,000 pounds.
d. Increase the price to $3; increase the quantity supplied to 5,000 pounds.
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Sensible buyers or sellers will want to continue acquiring information
A) as long as the additional information extends their choices. B) as long as the anticipated additional benefit exceeds the additional cost of doing so. C) as long as they can be assured of acquiring correct information. D) indefinitely, because more information is better than less.
Suppose Molly has an income of $35,000 annually and has inherited a savings account of $20,000. Wyatt has a job that pays $35,000 annually, but has debts totaling $6,000. Which of the following is TRUE?
A) We can expect Wyatt and Molly to save the same proportion of their incomes this year. B) We can expect Molly to save more than Wyatt this year. C) We can expect Wyatt to save more than Molly this year. D) We can expect Wyatt and Molly to have equal amounts of consumption this year.
Which of the following evidence does not support the expected utility theory?
A) People assign disproportionately high weights to rare events. B) Risk-averse people do not engage in fair bets. C) Risk-loving people do not purchase insurance policies. D) Risk-neutral people engage in fair bets.
The Laffer curve belongs to which of the following schools of economic thought?
a. Keynesian. b. Supply-side. c. Demand management. d. Classical.