Which of the following correctly identifies the trade-off that a budget constraint represents?
A) The amount of one good that has to be given up to purchase an additional unit of the other good
B) The optimum combination of goods that a consumer with a given income should purchase
C) The maximum amount of two goods that a consumer can purchase given his income
D) The amount of income that must be given up to obtain an additional unit of a good
A
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Suppose we want to use game theory to analyze how an oligopolist selects its optimal price. The cells of the payoff matrix show
A) the strategy that a firm must pursue to earn various levels of profit. B) the profit that each producer can expect to earn by pursuing a single strategy. C) the expected profits of rival firms. D) the profit that each producer can expect to earn from every combination of strategies by the firms in the market.
If Brazil experienced a period of rapid and unexpected inflation, causing Brazilians to lose confidence in the local currency (real) as a store of value, which of the following would be least likely to occur?
a. The value of the Brazilian real would depreciate on the foreign exchange market. b. Foreign currency would be used as a substitute for the real. c. The real would be used as a store of value in other countries d. Brazilians would save less. e. The purchasing power of the real would decrease.
Which of the following is true about the short-run Phillips curve?
a. The Fed can only shift the curve in the short run. b. In the short run, the Fed can shift the curve, but in the long run, the Fed can only move along it. c. In both the short run and the long run, the Fed can only shift the curve, it can never move along the curve. d. In both the short run and the long run, the Fed can only move the economy along the curve; it can never shift the curve. e. In the short run, the Fed can move the economy along the curve, but in the long run, the Fed can only chose which short run Phillips curve to be on.
When the American League instituted designated batters (that is, pitchers were exempt from batting), the shadow prices of throwing bean-balls (a pitch aimed at the batter's head):
A. did not change. B. fell. C. rose. D. disappeared.