Answer the following statement(s) true (T) or false (F)
1. An economic model is robust if it provides results that are testable and verifiable.
2. An easy, but not very insightful, possible explanation for apparently irrational behavior is that it is rational for a people with a taste for the behavior.
3. Most economic explanations can be reduced to the idea that human behavior is primarily a matter of taste.
4. Since economists assume that people act in their own self-interest, economic analysis does not apply to situations where people behave altruistically.
5. A model that is said to be robust is one that has many details and closely mimics reality.
1. False
2. True
3. False
4. False
5. False
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Any efficient allocation of public goods will be such that the sum of the marginal benefits is equal to the marginal cost -- but the level of the public good may differ depending on how income is distributed in the population.
Answer the following statement true (T) or false (F)
You're traveling in Japan and are thinking about buying a new kimono. You've decided you'd be willing to pay $175 for a new kimono, but kimonos in Japan are all priced in yen
If the kimono you're looking at costs 14,000 yen, under which of the following exchange rates would you be willing to purchase the kimono? (Assume no taxes or duties are associated with the purchase.) A) 24.5 yen per dollar B) 65 yen per dollar C) 80 yen per dollar D) You would purchase the new kimono at any of the above exchange rates.
Most employees ________ on the value of health insurance provided by employers, and most people ________ when buying individual health insurance policies
A) pay taxes; do not get a tax break B) pay taxes; get a tax break C) do not pay taxes ; do not get a tax break D) do not pay taxes; get a tax break
What happens to the output gap, the real interest rate, and net capital flows with the occurrence of each of the following events? Assume that exchange rates are flexible
a. The Federal Reserve increases the money supply. b. U.S. net exports decrease due to a decrease in incomes in Canada. c. Consumers decide to save more and spend less. d. Expected profits from newly-built factories in the United States decrease.