Lisa has an income of $250 per week, which she spends entirely on milk and eggs. The price of milk is $2 per gallon and the price of a dozen eggs is $1
What is the opportunity cost of a gallon of milk? If the price of a dozen eggs rises to $1.50, what happens to the opportunity cost of a gallon of milk?
The opportunity cost of a gallon of milk is 2 dozen eggs. If the price of eggs rises to $1.50 per dozen, the opportunity cost of a gallon of milk falls to 1.33 dozen eggs.
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When a government has a budget surplus, the surplus
A) helps finance investment. B) crowds-out private saving. C) must be subtracted from private saving to get total saving. D) increases the world real interest rate.
When buying a car from a commission salesman you improve your bargaining position by
a. shopping when the new model year cars have just arrived b. shopping when the showroom is full of customers c. shopping when the car lot has few cars left unsold d. shopping toward the end of the month
The principal reason why Thailand, Indonesia, and South Korea feared the effects of appreciation of the U.S. dollar in 1995-1997 was that
a. it would increase exports from these countries and worsen Japanese. b. it would increase exports from these countries and worsen unemployment. c. it would decrease exports from these countries since their currencies were tied to the dollar. d. it would decrease imports to these countries since their currencies were tied to the dollar.
Assume the central bank decides to pursue contractionary monetary policy. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real credit market with supply of real credit shifting to the right. b. Start the analysis in the real credit market with aggregate demand for real credit shifting to the left. c. Start the analysis in the real credit market with demand for real credit shifting to the left. d. Start the analysis in the real credit market with demand for real credit shifting to the right. e. Start the analysis in the real credit market with supply of real credit shifting to the left.