A(n) ________ in a country's money supply causes international capital
A. contraction; stock to stabilize.
B. expansion; outflows.
C. contraction; outflows.
D. expansion; inflows.
Answer: B
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Assume that the characteristic functions of different coalitions in a three-person group are given by: V(1,2,3) = $60 V(1,2) = $40, V(2,3) = $30, and V(1,3) = $35 . The values created by the individuals separately are given by: V(1) = $20, V(2) = $16, V(3) = $10 . Which of the following allocations will lie within the core?
a. Payoffs to individuals 1,2, and 3 are $21, $17,and $22 respectively. b. Payoffs to individuals 1,2, and 3 are $31, $17, and $12 respectively. c. Payoffs to individuals 1,2, and 3 are $21, $26, and $13 respectively. d. Payoffs to individuals 1,2, and 3 are $25, $18, and $17 respectively.
Economists argue that consumers are rational and that they allocate their income among the purchase of goods in such a way that maximizes their total utility. The higher their income, the more goods they buy and the higher is the total utility. If that's the case, how do you explain the fact that many people willingly give up some of their income to help the less fortunate? Do they sacrifice
utility? a. Of course they sacrifice total utility but that doesn't make them irrational. They get satisfaction from helping others. b. They sacrifice only that part of total utility that the income given away would have generated had it been spent on goods used for themselves. Irrational? Perhapsaccording to the economist's definition of rationality, but not according to others. c. Their total utility is not less because the marginal utility they gain by giving a dollar to others is higher than the marginal utility they derive from spending that dollar onthemselves. d. We cannot say if their total utility has changed because we cannot engage in interpersonal comparisons of utility. e. What they lose in total utility, they make up in consumer surplus, and that's rational.
Imposing a restrictive quota on imported plasma TVs will:
A. increase the price of the plasma TVs and decrease the quantity consumed. B. increase both the price of the plasma TVs and the quantity consumed. C. leave the price of the plasma TVs unchanged but decrease the quantity consumed. D. leave the price and the quantity consumed of plasma TVs unchanged, because domestic producers will expand production to make up for the reduction in imports