Which of the following describes the relationship between a confidence interval for y at a given value of x and a prediction interval for y at the same value of x?
a. The confidence interval will be narrower than the prediction interval.
b. The confidence interval will be always half the width of the prediction interval.
c. The confidence interval will be wider than the prediction interval.
d. The confidence interval will be the same width as the prediction interval.
Ans: a. The confidence interval will be narrower than the prediction interval.
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Refer to Figure 10-1. When the price of hoagies increases from $5.00 to $5.75, quantity demanded decreases from Q1 to Q0. This change in quantity demanded is due to
A) the fact that marginal willingness to pay falls. B) the law of diminishing marginal utility. C) the income and substitution effects. D) the price and output effects.
Which of the following explains why individuals must make choices?
a. competition among firms b. scarcity of resources c. inflation d. changes in the money supply e. conflict between positive and normative economic statements
World output of goods and services increases with specialization because
A. Each country's workers are willing to work harder than they did before specialization. B. The world's workers are more educated than before specialization. C. Each country's production possibilities curve shifts rightward. D. The world's resources are being used more efficiently.
Refer to the above figure. Unexpected expansionary monetary policy has caused the aggregate demand curve to shift to AD2. In the long run
A. real GDP will be Y1, and the price level will be above P2. B. real GDP will be between Y1 and Y2, and the price level will be between P1 and P2. C. real GDP will be Y2, and the price level will be P2. D. real GDP will be Y1, and the price level will be P1.