The model of monopolistic competition assumes that
a. there are only a few sellers
b. there are significant barriers to exit
c. each firm charges the same price for its output
d. the buyers are price setters
e. firms are strategically independent
E
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The key difference between "quantitative easing" and "credit easing" is that ________
A) the goal of the former is to raise expected inflation B) the latter refers to a substantial change in the composition of the central bank's balance sheet C) the latter refers to a substantial expansion of the central bank's balance sheet D) the former is endorsed by Federal Reserve Chairman Ben Bernanke, while the latter was devised by Japan's Prime Minister Shinzo Abe E) none of the above
Economists collect data on prices in every country and develop an index that describes the overall difference in prices between countries called the:
A. price parity purchasing index. B. consumer price index. C. consumer purchasing power index. D. purchasing power parity index.
Because the AFDC program reduced benefits by almost $1 for every $1 earned, a single parent of two small children requiring day care would have to
A. resort to crime just to make ends meet. B. work fulltime earning at least one-half the minimum wage to be better off working than on welfare. C. work fulltime earning at least twice the minimum wage to be better off working than on welfare. D. work fulltime earning at least the minimum wage to be better off working than on welfare.
Assume that an individual has to decide between a two-day vacation and a three-day vacation to the same place. If he uses optimization in differences, he will:
A) only think about the net benefits of the extra day. B) compare the total net benefits of both alternatives. C) choose the three-day vacation only if the costs incurred on the third day exceed the benefits he receives. D) spend more time to come to a decision than if he would have used optimization in levels.