Carlos and Darla are representative individuals playing the dictator game. Carlos is assigned the role of dictator and given $20 to split between the two of them. Based on previous experiments with this game by behavioral economists, about a third of the
time we would expect:
A. Carlos to keep all of the money for himself.
B. Carlos to give all of the money to Darla.
C. Carlos to split the money evenly with Darla.
D. Carlos to split the money, keeping a little more than half for himself.
Answer: A
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Suppose you transfer $1,000 from your checking account to your savings account. How does this action affect the M1 and M2 money supplies?
a. M1 and M2 are both unchanged. b. M1 falls by $1,000 . and M2 rises by $1,000. c. M1 is unchanged, and M2 rises by $1,000. d. M1 falls by $1,000 . and M2 is unchanged.
Which of the following is the most fundamental function of government?
a. protection of individuals and their property b. imposing progressive taxes to fund income-transfer programs c. regulating prices and wages d. provision of postal services and garbage collection
A firm maximizes profits by charging a lower price to foreign buyers if
A. it has a greater monopoly power in the foreign market than it has in its home market. B. the buyers in the home country have access to cheaper imports from the rest of the world. C. the foreign demand for its good is more elastic than the domestic demand. D. the size of the foreign market is much larger than the home market.
If Canada imports fishing poles from Mexico and Mexico imports bacon from Canada, which of the following would explain this pattern of trade?
A) Mexico has a lower opportunity cost of producing bacon than Canada and Mexico has a comparative advantage in producing fishing poles. B) The opportunity cost of producing fishing poles in Canada is higher than it is in Mexico, and the opportunity cost of producing bacon in Mexico. is higher than it is in Canada. C) Mexico must have an absolute advantage in producing fishing poles and Canada must have an absolute advantage in bacon. D) Mexico has a higher opportunity cost of producing fishing poles than Canada, and Canada has a higher opportunity cost of producing bacon.