Suppose that the price of a TV is $200 and he price of an MP3 player is $50. What is the opportunity cost of a TV (in terms of MP3 players), and what is the opportunity cost of an MP3 player (in terms of TVs)?
What will be an ideal response?
The opportunity cost of a TV is 4 MP3 players, and the opportunity cost of an MP3 player is one fourth of a TV.
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The Volcker Rule addresses the off-balance-sheet problem involving
A) trading risks. B) selling loans. C) loan guarantees. D) interest rate risks.
The mangers of Healthy Snacks and Healthy Bars are engaged in a strategic interaction in which their interests are aligned, but there is more than one possible equilibrium. All of the following can help the managers determine the equilibrium outcome except which one?
A) an announcement by Healthy Snacks regarding their future plans, but not an announcement by Healthy Bars regarding their future plans B) the Pareto criterion C) an announcement made by either firm regarding their future plans D) a focal point
Refer to the above figures. Externalities exist in both panels. After correcting for the externalities the prices should be
A) P1 and P3. B) P1 and P4. C) P2 and P4. D) P2 and P3.
A student noted that the football team won by a larger margin when the third-string played more minutes. Therefore, he recommended that the third-stringers become the first team. His conclusion was probably erroneous because he
a. confused positive and normative analysis. b. committed the fallacy of composition. c. failed to recognize that association is not causation. d. confused macroeconomics with microeconomics.