The real interest rate is:
A. adjusted for inflation.
B. the actual average interest rate in the economy.
C. the amount of interest the bank pays you for saving or charges you for borrowing.
D. the everyday notion of the interest rate.
Answer: A
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The magnitude of the slope of the budget line
A) is defined as marginal rate of substitution. B) equals the relative price of the good measured along the horizontal axis. C) increases when income increases. D) decreases when income increases.
According to the law of diminishing returns
A) the total product of an input will eventually be negative. B) the total product of an input will eventually decline. C) the marginal product of an input will eventually be negative. D) the marginal product of an input will eventually decline. E) none of the above
The availability of health insurance tends to:
A. decrease the quantity of health care demanded and cause an underallocation of resources to the health care industry. B. increase the quantity of health care demanded and cause an underallocation of resources to the health care industry. C. increase the quantity of health care demanded and cause an overallocation of resources to the health care industry. D. decrease the quantity of health care demanded and cause an overallocation of resources to the health care industry.
The post hoc, ergo propter hoc fallacy is the belief that
A. it is impossible to draw generalizations about cause and effect. B. what is true for a part is necessarily true for the whole. C. what is true for the whole is necessarily true of the parts. D. if Event A happens before Event B happens, then Event A causes Event B to occur.