Which of the following is NOT a commitment device?
A. A manufacturer's 2-year agreement to fix, at no cost to you, anything that breaks on your computer.
B. A non-refundable advance payment to reserve a room at a resort.
C. A pre-nuptial agreement that provides for a large penalty in the event a spouse has an affair.
D. High fines for illegal parking on campus.
Answer: D
You might also like to view...
Since a monopoly faces a downward-sloping demand curve,
A. then, as Adam Smith wrote, “the price of monopoly is upon every occasion the highest which can be got.” B. price always exceeds average revenue. C. marginal revenue increases as output increases. D. the monopolist is a price maker.
The Bureau of Labor Statistics has taken several steps to reduce the bias in the consumer price index. Which of the following is not one of the steps taken to reduce the bias?
A) conducting a point-of-purchase survey to track where consumers actually make their purchases B) using statistical methods to reduce the size of the quality bias C) updating the market basket every two years, rather than every 10 years D) incorporating substitutions by consumers when prices of specific products rise rapidly
Economies of scale exist when
a. long-run average costs decline as output increases. b. long-run average costs are constant. c. long-run average costs increase as output increases. d. short-run average costs decline. e. short-run average costs increase.
The transactions demand for money is the demand for money by households for:
a. predictable spending purposes. b. liquidity purposes. c. rainy day spending. d. investing purposes.