If an economy can produce a maximum of 100 units of good X and the opportunity cost of 1X is always 5Y, then what is the maximum number of units of good Y the economy can produce?
What will be an ideal response?
500
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Refer to Game Matrix V. Which of the following values of X and Y result in there being no pure strategy Nash Equilibrium?
a. X = 21, Y = 9. b. X = 19, Y = 11. c. X = 31, Y = 11. d. There will always be at least one pure strategy Nash Equilibrium in this game.
An individual rents an apartment for $200 per month. His monthly opportunity cost of commuting to work from this apartment is $50. After a year, he moves to an apartment closer to his place of work, but pays $250 as rent
Compared to the initial situation, after a year: A) his direct cost of renting the apartment increases, while the indirect cost of renting the apartment remains unchanged. B) his direct cost of renting the apartment increases, while the indirect cost of renting the apartment decreases. C) his direct cost of renting the apartment remains the same, while the indirect cost of renting the apartment decreases. D) his direct cost of renting the apartment remains the same, while the indirect cost of renting the apartment increases.
Monetarism is a school of thought put forth by Milton Friedman. He argued that the economy would most likely
A) be below potential GDP. B) be above potential GDP. C) be unstable. D) be at potential GDP.
Which of the following best describes the crowding-out effect?
a. An increase in government expenditures will cause taxes to rise, which will reduce both aggregate demand and output. b. An increase in borrowing by the government will push interest rates upward, which will lead to a reduction in private spending. c. An increase in borrowing by the government will decrease the money supply and, thereby, reduce aggregate demand. d. An increase in government expenditures will cause the general level of prices to fall and, thereby, reduce aggregate demand and output.