The representative consumer's discount factor B
A. equals the share of production going to labor
B. is a parameter capturing how patient the consumer is
C. is a choice parameter controlling consuming versus saving
D. is the reduction in price from a competitive factor market
Answer: B. is a parameter capturing how patient the consumer is
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How does each of the following shift the supply of loanable funds and the demand for loanable funds curves? What is the effect of each on the equilibrium real interest rate and equilibrium quantity of loanable funds?
a. Households' disposable incomes increase b. An increase in expected profit
Russia and Qatar made the first serious moves in October 2008 toward forming an OPEC-style cartel for natural gas. The two strategies these countries face are to comply with the cartel agreement or to cheat on the cartel agreement
If both countries comply, the economic profit for each will be $140 million. If one country cheats, that country earns $200 million in economic profit and the other country will have an economic loss of $10 million. If all countries cheat, they break even. What is the outcome of this game if it is only played once? A) Each country will comply with the cartel agreement. B) Two countries will comply and one will cheat, but we cannot predict which one will cheat. C) One country will comply and two will cheat, but we cannot predict which ones will cheat. D) None of the countries will comply with the cartel agreement.
The text asserts that the allocation of resources among firms is efficient. What assumptions must hold for this to be true?
What will be an ideal response?
Increase in capacity utilization will ________ the expenditure curve:
A) decrease. B) increase. C) not change. D) none of the above.