Answer the following statement(s) true (T) or false (F)
1. The term price as used in microeconomics refers to the absolute price of a commodity.
2. The relative price of bread in terms of wine is the amount of wine which can be traded in exchange for a loaf of bread.
3. When relative prices are measured in terms of dollars, the term dollar refers to currency.
4. When absolute prices are measured in terms of dollars, the term dollar refers to currency.
5. Relative prices cannot fall when absolute prices are rising.
1. False
2. True
3. False
4. True
5. False
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With respect to events like global warming some economists suggest using falling discount rates because
A) exponential discounting virtually gives no weight to (large) costs incurred far into the future. B) exponential discounting weights (large) costs incurred far into the future heavily. C) events far in the future do not affect us. D) we should not care about costs far in the future.
In game theory, we usually assume that all players
A) act rationally. B) use the information available to them to decide on a best strategy. C) know about the payoffs of the other players. D) All of the above.
Suppose your expenses for this term are as follows: tuition: $9,000, room and board: $1,500, books and other educational supplies: $1,000. Further, during the term, you can only work part-time and earn $3,000 instead of your full-time salary of $8,000
What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college? A) $10,000 B) $13,000 C) $15,000 D) $18,000
Other things equal, an increase in consumer wealth will:
A. Increase aggregate supply B. Increase aggregate demand C. Reduce the price level D. Reduce the money supply