The hypothesis suggesting that people combine the effects of past policy changes on economic variables with their own judgment about the future effects of current and future economic policy is referred to as the
A) passive expectations hypothesis. B) adaptive expectations hypothesis.
C) rational expectations hypothesis. D) active expectations hypothesis.
C
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What kind of elasticity is relevant when you are trying to figure out how a price cut by the burger shop next door will affect the demand for your pizza? Explain
What will be an ideal response?
If a perfectly competitive market is in equilibrium and then market demand increases, which of the following would happen?
a. producer surplus would definitely increase and consumer surplus may increase or decrease b. producer surplus would definitely decrease and consumer surplus may increase or decrease c. consumer surplus would definitely decrease and producer surplus may increase or decrease d. consumer surplus would definitely increase and producer surplus may increase or decrease e. producer and consumer surplus would remain unchanged