On a vacation to China, you find yourself eating every meal at the local Burger King rather than buying a meal from one of the street vendors. Your traveling companion claims that you are irrational, since you never eat Burger King hamburgers when you are home, and Burger King's hamburgers cost more than the meals prepared and sold by China's street vendors. An economist would most likely explain
your behavior by suggesting that
a. your behavior is rational, but your friend's behavior is clearly irrational.
b. you are clearly irrational, but your friend's behavior is rational.
c. the Burger King brand name suggests consistent quality.
d. the advertising by Burger King in China is more persuasive than the advertising by Burger King in your home town.
c
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A major contributing factor to the instability of money demand over the past 25 years is the:
A. introduction of credit cards. B. introduction of financial instruments that pay higher returns than money but can be used as a means of payment. C. Fed has changed the way the money aggregates are defined. D. failure of many savings and loans.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The best point for society would be
A. either Point B or Point C, as the total amount being produced at either of these points is approximately the same. B. at any of the labeled points, as all of the points represent an efficient allocation of resources. C. Point C, as at this point there are approximately equal amounts of LCD and OLED televisions being produced. D. indeterminate from this information, as we don't have any information about the society's desires.