Risk aversion is best explained by:
a. timidness.
b. increasing marginal utility of wealth.
c. constant marginal utility of wealth.
d. decreasing marginal utility of wealth.
d
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If actions by the President and Congress reduce the federal government budget deficit, then interest rates will _____, the U.S. dollar will _____, and the foreign trade deficit will _____
a. increase; appreciate; increase b. increase; depreciate; increase c. decrease; appreciate; decrease d. decrease; depreciate; increase e. decrease; depreciate; decrease
The first step of the four step process is to
a. identify the new equilibrium and then compare the original equilibrium price and quantity to the new equilibrium price and quantity. b. decide whether the economic change being analyzed affects demand or supply. c. draw a demand and supply model before the economic change took place. d. decide whether the effect on demand or supply causes the curve to shift to the right or to the left, and sketch the new demand or supply curve on the diagram.
Which statement is false?
A. The monopolist's demand and marginal revenue curves are two separate curves. B. The monopolist can sell more output only by lowering price. C. The monopolist produces at the minimum point of its ATC curve. D. None of these statements are false.
In a price system, changes in prices
A) make it difficult for the system to function well. B) imply that people have made mistakes in the past. C) signal to everyone in the system what goods are relatively more or less scarce. D) signal to policy makers what goods should and should not be taxed more.