Which of the following allows us to compare average levels of real production per person in different nations in a way that adjusts for differences in true costs of living?
A. per capita nominal GDP based on foreign exchange rates
B. nominal GDP based on purchasing power parity
C. per capita real GDP based on purchasing power parity
D. real GDP based on foreign exchange rates
Answer: C
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One baseline assumption that economists make about consumer behavior is that:
A. people are rational utility maximizers. B. people will always choose short-term benefits to longer-term payoffs. C. people will always choose what makes them happiest. D. people are unpredictable.
One of the main tools used by economists to measure the actual distribution of income is
a. the Lorenz curve b. the Golden Rule c. the MR = MC rule d. the MRP = MRC rule e. the capital / labor ratio
If leakages are less than injections, ceteris paribus:
(a) National income will increase. (b) National income will decrease. (c) National income will stay in equilibrium. (d) None of the above.
Conspicuous consumption is a more effective signal of ability for people who:
A. live in small towns instead of large cities. B. live in large cities instead of small towns. C. don't understand moral hazard. D. already have well-established reputations.