Briefly define an endogenous variable and an exogenous variable. What variables are endogenous in the classical model? What variables are exogenous
What will be an ideal response?
An endogenous variable is a variable whose value is determined within or by the model whereas the value of an exogenous variable is determined by forces outside the model. The real wage, the level of labor, and output are endogenous in the classical model. Exogenous variables include labor supply, capital, and technology.
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Jake plans to spend $100 on fried chicken and Pepsi. The price of a fried chicken is $5 and Pepsi is $2 per bottle. If Jake buys 10 fried chickens how many bottles of Pepsi can he buy?
A) 50 B) 10 C) 25 D) 75
The magnitude of the slope of an indifference curve is:
A) called the marginal rate of substitution. B) equal to the ratio of the total utility of the goods. C) always equal to the ratio of the prices of the goods. D) all of the above E) A and C only
Which of the following is most likely to be characterized by substantial asymmetric information?
a. a soft drink purchased in a vending machine b. a car wash to benefit the local high school band c. a collectible baseball card purchased on eBay d. wireless service that includes unlimited minutes and texting
An externality is an event that
A. is external to economics. B. always brings harm to someone in the economy. C. is incidental to some market activity. D. harms the economy as a whole rather than a particular person.