Is the equation of exchange an economic model?
a. Yes, it is a simple but powerful model.
b. No, economic models cannot be equations.
c. No, it is merely an arithmetic statement.
d. Yes, it is a cause-and-effect model.
c
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Which of the following is TRUE when a budget deficit exists?
A) Dissaving exists. B) Tax revenues exceed government expenditures. C) A trade surplus exists. D) Government expenditures exceed tax revenues.
In a market with a binding price control, a. there is an imbalance between the quantity supplied by sellers and the quantity demanded by buyers. b. the costs of production are fully reflected in the price paid
c. the price observe reflects the scarcity of the good. d. all of the above are true.
A purely self-interested diner is more likely to tip:
A. whenever he can afford to. B. only when dining in a very up-scale restaurant. C. always, to assure good service. D. only when dining in a restaurant at which he often eats.
Gregory is considering attending a concert with a ticket price of $40. He estimates that the cost of driving to the concert and parking there will add an additional $20
In order to attend the concert, Gregory will have to take time off from his part-time job. He estimates that he will lose 5 hours at work, at a wage of $8 per hour. In terms of dollars, Gregory's opportunity cost of attending the concert equals A) $80. B) $100. C) $20. D) $60. E) $40.