An economic principle that explains why people pursue different occupations is
A) absolute advantage.
B) international trade.
C) comparative advantage.
D) NAFTA.
Answer: C
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Refer to Sales Tax. Prior to the sales tax, which of the following was false?
a. Consumer surplus was A+B+C+D+E. b. Producer surplus was F+G+H+I+J. c. Government tax revenue was zero. d. Dead-weight loss was zero.
A common definition of a recession is a period of time
A) of at least 6 months during which real GDP decreases. B) with an increase in real economic output from the previous period. C) with no change in real GDP. D) with no change in the dollar (money) value of economic output.
Your task is to estimate the ice cream sales for a certain chain in New England
The company makes available to you quarterly ice cream sales (Y) and informs you that the price per gallon has approximately remained constant over the sample period. You gather information on average daily temperatures (X) during these quarters and regress Y on X, adding seasonal binary variables for spring, summer, and fall. These variables are constructed as follows: DSpring takes on a value of 1 during the spring and is zero otherwise, DSummer takes on a value of 1 during the summer, etc. Specify three regression functions where the following conditions hold: the relationship between Y and X is (i) forced to be the same for each quarter; (ii) allowed to have different intercepts each season; (iii) allowed to have varying slopes and intercepts each season. Sketch the difference between (i) and (ii). How would you test which model fits the data the best? What will be an ideal response?
Player 1 and Player 2 are playing a game in which Player 1 has the first move at A in the decision tree shown below. Once Player 1 has chosen either Up or Down, Player 2, who can see what Player 1 has chosen, must choose Up or Down at B or C. Both players know the payoffs at the end of each branch. 
Suppose Player 1 and Player 2 enter into a binding agreement in which Player 1 agrees to pay Player 2 a fixed amount of money to get Player 2 to play Up when it is Player 2's turn. How much will Player 1 have to pay Player 2 to get Player 2 to play Up?
A. $0 B. at least $10. C. at least $50. D. at least $20.