An important variable that is left out of economic models is
a. implicit costs.
b. excess profits.
c. entrepreneurship.
d. the opportunity cost of resources.
C
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Which of the following is an invalid argument for protection?
A) redistribution of income B) infant industry protection C) preservation of the home market D) All of the above
Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes. If these attempts are successful, what will happen to the equilibrium price and quantity of potatoes?
a. Price will increase and quantity decrease. b. Price will increase and quantity increase. c. Price will decrease and quantity increase. d. Price will decrease and quantity decrease. e. No change in equilibrium price and quantity will occur.
Asymmetric shocks pose a problem for nations linked by fixed exchange rates to a base currency. In general:
A) the home nation always has a better outcome than its foreign trading partner. B) both nations share a common currency and so will experience equal results. C) when the base currency nation takes any action to counteract the shock, it forces its exchange rate partner to do the same to maintain its peg. D) both nations only get half the benefit of any economic policy.
If average movie ticket prices rise by about 5 percent and attendance falls by about 2 percent, other things being equal, the elasticity of demand for movie tickets is about:
A. 2.5. B. 0.4. C. 0.0. D. 0.6.