Assume the Marshall-Lerner condition holds. Which of the following will cause a reduction in net exports?
A) a reduction in government spending
B) a reduction in investment
C) an increase in foreign output
D) an increase in the real exchange rate
E) all of the above
D
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In order for a hotel to successfully price discriminate so that senior citizens are given a discount, the hotel must be able to
A) offset the economic loss from charging senior citizens a lower price by lowering the marginal cost of renting rooms to senior citizens. B) lower its prices to younger customers too. C) prevent senior citizens from reselling their rooms to younger customers. D) shift its demand curve rightward. E) determine if a senior citizen can pay a higher price.
If people increase their rate of time preference
A) more credit is made available in the banking system. B) less credit is made available in the banking system. C) the demand for credit shifts left. D) the supply of credit shifts right.
Which of the following statements is false?
A. Externalities can sometimes be internalized through individual voluntary agreements. B. It would be a relatively easy matter to establish property rights in the air. C. Persuasion can be used in some cases to internalize externalities. D. Taxes and subsidies are sometimes used as corrective devices for market failures.
If both supply and demand decrease, which of the following happens?
a. The equilibrium quantity increases. b. The equilibrium price and the equilibrium quantity increase. c. The equilibrium price and the equilibrium quantity decrease. d. The equilibrium price decreases and the equilibrium quantity is indeterminate. e. The equilibrium quantity decreases and the equilibrium price change is indeterminate.