The slope of an indifference curve is called the
A. bliss gradient.
B. happiness slope.
C. average transformation rate.
D. marginal rate of substitution.
Answer: D
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The process of adjustment to a new long-run equilibrium in a perfectly competitive industry is complete when
A. no firms want to enter or exit the industry. B. every firm has adjusted its production process to make the most efficient use of its resources. C. investors in the industry receive the standard economy-wide rate of return on their investments. D. All of the responses are correct.
In a coin toss bet, where both heads and tails are equally likely, you win a $2 on heads but lose $1 on tails. The expected value of the bet is
a. $0.50 b. -$0.50 c. $1.00 d. $0.00
A country can consume outside its production possibilities curve by trading.
Answer the following statement true (T) or false (F)
If two nominal exchange rates are given as 4 shekel/dollar and 0.711 dinar/dollar, so 1 dollar can buy either 4 shekels or 0.711 dinars, then each Jordanian dinar is worth ________ Israeli shekels, and each shekel is worth ________ dinars.
A. 5.623; 0.178 B. 0.178; 5.623 C. 1.96; 0.51 D. 0.51; 1.96