What is the endowment effect?
A) the phenomenon that economic agents are endowed with different qualities and abilities so that trade among individuals increase efficiency
B) the tendency for economic agents with abundant resources to consume a proportionately greater quantity of goods and services
C) the tendency of people to be unwilling to sell something they already own even if they are offered a price that is greater than the price they would be willing to pay to buy the good if they didn't already own it
D) the tendency of firms to use celebrities endowed with good looks to promote their products
Answer: C
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Consider an economy with a labor force of 100 million people. Each period, 60% of the unemployed population finds a job while 15% of the employed population loses their job. What is the steady-state unemployment rate in the economy?
A. 60% B. 20% C. 15% D. 10% E. 5%
According to the capture hypothesis, it appears that regulators eventually end up
A. adopting policies that benefit consumers at the expense of the regulated firms. B. satisfying neither producers nor consumers, but striving to control as much as possible. C. adopting policies that benefit the firms being regulated. D. adopting policies that benefit no one.
A payment to an owner of a resource in excess of its opportunity cost is know as
A. real wages. B. economic rent. C. accounting profits. D. financial interest.
The chapter seems to imply that the direct influence of short-term interest rate changes by central bankers is not that powerful in terms of their direct impact on spending. Why then do so many people pay attention to the monetary policy?
What will be an ideal response?