Using the typical estimate of the sacrifice ratio, how much output would be lost in reducing inflation from 3% to 1%?
a. 5%
b. 10%
c. 15%
d. 20%
b
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In an economic model, assumptions
A) must be applicable to all real-world situations. B) must be eliminated before being used to make sure the model is realistic. C) are not important in determining the usefulness of the model. D) define the set of circumstances in which the model is most likely to be applicable in the real world.
To economists, good environmental policy begins by acknowledging one of the Ten Principles of Economics:
a. Trade can make everyone better off. b. People face trade-offs. c. Markets are usually a good way to organize economic activity. d. A country's standard of living depends on its ability to produce goods and services.
Which of the following do behavioral economists use to demonstrate how our sense of fairness affects our decision making?
a. the endowment effect b. the gambler’s fallacy c. the law of diminishing marginal utility d. the ultimatum game
Refer to the following graphs.
A recent report indicates that the device known as the right heart catheter used to diagnose heart conditions poses more risks than previously thought. The effect of the report on the market for right heart catheters is best shown by which of the graphs?
A. I B. II C. III D. IV