When is a balance of payments account out of balance?
a. only when exports are greater than imports
b. only when imports are greater than exports
c. when exports are either greater or less than imports
d. only when exports are greater or less than imports over a sustained period
e. never
E
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Any combination of two goods that lies within the production possibilities frontier
A) is currently impossible to produce. B) is currently possible to produce. C) represents a more efficient combination of output than anything lying beyond the frontier. D) represents a more efficient combination of output than anything lying on the frontier.
A good is considered normal when its income elasticity of demand is ___ and inferior when the its income elasticity of demand is ___
a. Greater than zero, less than zero. b. Less than zero, greater than zero. c. Greater than one, less than one. d. Less than one, greater than one.
Studies show that doctors earn a compensation that is almost 20% higher than lifeguards, although both these professionals are considered to be life savers. Which of the following accounts for this difference in earnings?
a. Differences in human capital b. Differences in ability c. Differences in on-the-job experience d. Differences in the magnitude of risk associated with the job
A behavioral economist is asked to sum up her criticism of the traditional model of consumer theory in a single word. Which of the following words would she most likely choose?
a. foolish b. illogical c. oversimplified d. useless