What does the assumption of perfect knowledge include?
What will be an ideal response?
It is assumed that households possess knowledge of the qualities and prices of all goods available in the market and that firms have all available information concerning wage rates, capital costs, and output prices.
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The average price of a share of stock on the New York Stock Exchange falls by 30 percent. Other things being equal, we would expect
A) a shift up of the consumption function. B) an increase in the marginal propensity to consume. C) a decrease in the marginal propensity to consume. D) a shift down of the consumption function.
The quantity supplied of a good or service is the quantity that a producer ________ at a particular price during a given time period
A) is willing to sell B) actually sells C) needs to sell D) should sell