According to the capture hypothesis, it appears that regulators eventually end up
A) adopting policies that benefit the firms being regulated.
B) adopting policies that benefit consumers at the expense of the regulated firms.
C) adopting policies that benefit no one.
D) satisfying neither producers nor consumers, but striving to control as much as possible.
A
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Suppose higher prices lead consumers to switch from shopping at Abercrombie & Fitch to shopping at Wal-Mart. If the CPI does not reflect this change, it is referred to as
A) a new goods bias. B) a quality change bias. C) an outlet substitution bias. D) a new price bias. E) store bias.
If you are offered a gamble in which you win 500 dollars 3/8 of the time and you lose 500 dollars 5/8 of the time, what is your expected payoff and your behavior given that you are a risk-lover?
A) $500, take the gamble B) -$125, take the gamble C) -$125, it is unclear what you would do without further information D) $500, decline the gamble E) -$125, decline the gamble