Consider the case of a teacher who tells students that those who miss more than three classes for any reason will automatically receive a lower grade
A) This is an example of a positive incentive for students to attend class.
B) This is an example of a negative incentive for students to attend class.
C) The teacher is assuming that students are irrational, and she must force them to attend class.
D) Students who miss more than three classes are irrational.
Answer: B
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For the Fed, price stability means a low and stable rate of inflation
a. True b. False
Assume that there is a surplus in the market for hybrid automobiles. Which of the following statements correctly describes this situation?
A) The supply of hybrid automobiles is greater than the demand for hybrid automobiles. B) Some consumers will be unable to obtain hybrid automobiles at the market price and will have an incentive to offer to buy the product at a higher price. C) The price of hybrid automobiles will fall in response to the surplus; as the price falls the quantity demanded will increase and the quantity supplied will decrease. D) The surplus will cause an increase in the equilibrium price of hybrid automobiles.