Real GDP would increase by 3 percent if nominal GDP increased by:
A. 2 percent and inflation increased by 1.5 percent.
B. 5 percent and inflation increased by 2 percent.
C. 1 percent and inflation increased by 2 percent.
D. 6 percent and inflation increased by 2 percent.
Answer: B
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A consumer has $1,000 a week to spend on renting square feet of housing x1 (at a price of $5 per square foot) and eating out meals x2 (at a price of $20 per meal). Derive the budget line equation and find the opportunity cost of housing in terms of meals in your equation.
What will be an ideal response?
Suppose that choice sets are convex but we tastes may or may not be convex. (Assume all our other usual assumptions about tastes hold.) The first order conditions of the constrained utility maximization problem are then
A. necessary conditions for a true optimum. B. sufficient conditions for a true optimum. C. necessary and sufficient conditions for a true optimum. D. none of the above.
Any non-credible threat that is part of a Nash equilibrium in a sequential game cannot be played along the Nash equilibrium path.
Answer the following statement true (T) or false (F)
Two components of labor are:
A) residential location and education. B) natural ability and human capital. C) money and financial wealth. D) ingenuity and job-specific machinery.