What are the two characteristics that distinguish public goods from private goods?
A. Nonrivalry and nonexcludability.
B. Liability rules and lawsuits.
C. The Coase theorem and efficiency.
D. Positive and negative externalities.
Answer: A
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In the figure above, illustrate the effect of an increase in the U.S. interest rate. What is the effect on the foreign exchange rate?
What will be an ideal response?
Suppose the current exchange rate between the euro and the United States dollar is 1.15 euros per dollar. If interest rates in the United States increase and interest rates in Europe remain unchanged then
A) the demand for dollars will increase. B) the demand for dollars will decrease. C) the demand for euros will increase. D) None of the above answers is correct.
Most mutual funds are
A) no-load funds. B) load funds. C) large-load funds. D) small-load funds.
Assume that Joe and Sarah, from the figure shown, are also dating, in addition to working together on the joint school project. Further assume that Joe is madly in love with Sarah, who is an excellent student. Sarah tells Joe that she will break up with him if he does not put forth high effort on this project. This future punishment by Sarah is an example of:
This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.
A. a commitment strategy.
B. an effort optimization strategy.
C. an ultimatum.
D. a bargaining strategy.