Say you are at the bar trying to decide which drink to buy. The waiter informs you they have two drinks available: red wine and stout beers. Since you like red wine much more than beer, you decide to order wine. Nevertheless, as you prepare to inform the waiter your decision he tells you that they also have Pale Ale beers, and you happened to like stouts much more than pale ales. If we take into consideration the halo effect you are probably going to order
A. the pale ale.
B. the red wine.
C. the stout.
D. a completely different drink.
Answer: C
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To develop a useful picture of a firm's behavior, economists assume that the
a. firm's goal is to maximize total revenue b. firm's goal is to maximize profit c. firm's goal is to minimize marginal cost d. roles of owner, manager and worker are performed by the same individuals e. roles of owner, manager and worker are interchangeable
An increase in the budget deficit
a. reduces investment because the interest rate rises. b. reduces investment because the interest rate falls. c. raises investment because the interest rate rises. d. raises investment because the interest rate falls.
Expenditure-reducing policies designed to improve a current account deficit
A) turn domestic spending towards domestic goods. B) reduce the overall level of demand in the economy. C) turn domestic spending towards foreign goods. D) increase the overall level of demand in the economy.
Total revenue will rise if
A. demand for a good is inelastic and its price rises. B. demand for a good is elastic and its price rises. C. demand for a good is inelastic and its price falls. D. None of these choices are true.