Jaime's father gives her a car for her graduation from college, but Jaime wants a smartphone. This implies that
A) Jaime's father is not acting out of self-interest because he knows that she really wants a smartphone.
B) Jaime's father is acting out of self-interest because he wants to give her something more expensive.
C) Jaime is not acting out of her self-interest by wanting something different from what her father gives her.
D) Jaime is not rational by asking for a smartphone instead of a car.
Answer: B
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Which of the following lists two things that both increase the money supply?
a. the Fed buys bonds and lowers the discount rate. b. the Fed buys bonds and raises the discount rate. c. the Fed sells bonds and lowers the discount rate. d. the Fed sells bonds and raises the discount rate.
To illustrate the classical argument that "supply creates its own demand," the aggregate supply curve should be drawn:
A. downward-sloping. B. upward-sloping. C. horizontal. D. vertical.
If asset prices rise:
A. productive capacity increases. B. real wealth increases. C. it is unclear whether wealth increases or inflation has occurred. D. inflation increases.
If a country possesses the absolute advantage in the production of one good:
A. it can produce more of that good given the same resources. B. then it must also possess the absolute advantage in the production of the other good. C. then it must also possess the comparative advantage in the production of the other good. D. then it must also possess the comparative advantage in the production of both goods.