In considering the relationships between price and quantity demanded, ceteris paribus directs the economist to assume that:
A. price increases affect quantity.
B. quantity increases affect prices.
C. neither price nor quantity affect demand.
D. all other variables remain unchanged.
Answer: D
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Refer to Figure 2-2. What is the opportunity cost of one dozen roses?
A) 0.4 dozen orchids B) 2.5 dozen orchids C) 7.25 dozen orchids D) 16 dozen orchids
To test whether or not the population regression function is linear rather than a polynomial of order r,
A) check whether the regression R2 for the polynomial regression is higher than that of the linear regression. B) compare the TSS from both regressions. C) look at the pattern of the coefficients: if they change from positive to negative to positive, etc., then the polynomial regression should be used. D) use the test of (r-1) restrictions using the F-statistic.
"It would be an undue hardship to require people whose income is below $15,000 per year to pay income taxes." This statement reflects which of the following principles for a tax?
a. Benefits-received. b. Inexpensive-to-collect. c. Ability-to-pay. d. Fairness of contribution.
Why does a downward-sloping Phillips curve imply a positive sacrifice ratio?