An editorial in the paper argues that a person only should be allowed to attend school if the marginal cost of educating that person is less than the marginal benefit of educating that person. The writer's reasoning is an application of:
A. negative economics.
B. positive economics.
C. economic naturalism.
D. normative economics.
Answer: D
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Suppose that the price of a Big Mac is a good approximation of the price level in the country. A Big Mac costs £2 in London and $3 in New York
a) If purchasing power parity holds, what is the exchange rate between the U.S. dollar and the British pound? b) If the current exchange rate is $1.6 per pound, what is the dollar price of a Big Mac in London? What do you predict will happen to the exchange rate? Explain. c) The exchange rate between the U.S. dollar and the Russian ruble is 30 rubles per dollar. If purchasing power parity holds, what is the price of a Big Mac in Moscow?
Which of the following is not considered as a unilateral transfer?
a. income earned from foreign investments b. foreign aid c. personal gifts to friends or family abroad d. institutional charitable donations e. government transfers to foreign residents
When a cartel breaks down and its members start cheating, the behavior in the industry becomes a
A. noncooperative game. B. zero-sum game. C. positive sum game. D. high stakes game.
Legal tender is
A. money that has a value other than as a currency. B. money that a government has required to be accepted in settlement of debts. C. money that cannot be counterfeited. D. money that must be backed by gold.