Other things constant, which of the following would tend to increase the demand for Disney World vacations?
A) A rise in the price of Hawaiian vacations (a substitute for Disney World)
B) A rise in income, if Disney World vacationing is a normal good
C) A fall in the price of air travel (a complementary good)
D) New information that Disney World will raise its prices once the summer season is over
E) All of the above.
E
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Each member in a group might do what's best for himself or herself instead of behaving in a way that optimizes the well-being of the entire group. This gives rise to the problem of:
A) Pareto inefficiency. B) free riding. C) irrational behavior. D) disequilibrium.
In an efficient market with rational expectations, the actual price of an asset
A) will equal its expected price. B) will often be below its expected price. C) will often be above its expected price. D) equals its expected price plus a random error term.