When individuals use ________ about an economic variable to make a decision, expectations are rational
A) only historical information B) all available information
C) only information garnered in the private sector D) only information announced by the Fed
B
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In an effort to discover whether or not workers understand inflation, economist Robert Shiller conducted a survey. When asked about the effect of general inflation on their wages or salary, the most popular response coming from workers was,
A) "My wages usually catch up to rising prices within a year." B) "My wages have always increased by more than the rate of inflation." C) "The price increase will create extra profit for my employer.... There will be no affect on my pay." D) None of the above is correct.
Suppose that a monopolist must choose between two points on its demand curve: it can sell 100 units for $3 each, or it can sell 150 units for $2 each. Which of the following is true?
a. The monopolist is facing elastic demand. b. The monopolist is facing unit elastic demand. c. The monopolist is facing inelastic demand. d. The monopolist is facing perfectly elastic demand. e. The elasticity of demand cannot be determined with the information given.