You have just noticed that the dollar appreciated and you suspect that U.S. policymakers were behind this change. Which would you choose as the most likely cause of this appreciation in the real exchange rate?
A. A decrease in the money supply
B. A temporary increase in government purchases
C. An increase in the money supply
D. A temporary decrease in taxes
Answer: A
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Answer the following statement(s) true (T) or false (F)
1. An economic model is robust if it provides results that are testable and verifiable. 2. An easy, but not very insightful, possible explanation for apparently irrational behavior is that it is rational for a people with a taste for the behavior. 3. Most economic explanations can be reduced to the idea that human behavior is primarily a matter of taste. 4. Since economists assume that people act in their own self-interest, economic analysis does not apply to situations where people behave altruistically. 5. A model that is said to be robust is one that has many details and closely mimics reality.
A falling average cost implies that
a. marginal cost is above average cost b. marginal cost is below average cost c. marginal cost is equal to average cost d. none of the above
Chris has a one-hour break between classes every Wednesday. Chris can either stay at the library and study or go to the gym and work out. The decision Chris must make is:
A. not an economic problem because it's an hour that Chris has no matter what he does. B. an economic problem because Chris has only one hour, and engaging in one activity means giving up the other. C. not an economic problem because neither activity costs money. D. an economic problem because the tuition Chris pays covers the cost of both the gym and the library.
Table 1.3 shows the hypothetical trade-off between different combinations of brushes and combs that might be produced in a year with the limited capacity for Country X, ceteris paribus.Table 1.3Production Possibilities for Brushes and CombsCombinationNumber of combsOpportunity Cost(Foregone brushes)Number of brushesOpportunity Cost (Foregone combs)J4 0NAK3 10 L2 17 M1 21 N0NA23 On the basis of Table 1.3, in the production range of 2 to 3 combs the opportunity cost of producing 1 more comb in terms of brushes is
A. 3.33. B. 0.67. C. 0.14. D. 7.0.