Which describes the economic meanings of value and price?
A) Value is exchange worth minus marginal benefit, and price is the dollars that must be paid.
B) Value is the marginal benefit obtained, and price is the dollars that must be paid.
C) Value refers to the gain the producer gets from the good or service, and price refers to the gain the consumer gets from the good or service.
D) Value refers to the dollars that must be paid, and price refers to the cost of producing the good.
E) They are the same and both mean the dollars that must be paid.
B
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An increase in government spending, other things constant, will cause a: a. leftward shift of the aggregate supply curve
b. rightward shift of the aggregate supply curve. c. leftward shift of the aggregate demand curve. d. rightward shift of the aggregate demand curve. e. downward movement along the aggregate supply curve.
A rational decision maker takes an action if and only if
a. the average benefit of the action exceeds the average cost. b. the average cost of the action exceeds the average benefit. c. the marginal benefit of the action exceeds the marginal cost. d. the marginal cost of the action exceeds the marginal benefit.
If a McDonald's Big Mac cost $4.50 in the United States and 3.60 euros in the Euro area, then purchasing-power parity implies the nominal exchange rate is how many euros per dollar?
a. 1.25 If the value is less than this, it costs more dollars to buy a Big Mac in the U.S. than in the Euro area. b. 1.25 If the value is less than this, it costs fewer dollars to buy a Big Mac in the U.S. then in the Euro area. c. .80 If the value is less than this, it costs more dollars to buy a Big Mac in the U.S. than in the Euro area. d. .80 If the value is less than this, it costs fewer dollars to buy a Big Mac in the U.S. than in the Euro area.
In the dynamic aggregated demand and aggregate supply model, inflation occurs if
A) the AD curve shifts more to the right than the LRAS curve. B) the SRAS curve shifts more to the right than the AD curve. C) the AD curve shifts to the left and the SRAS curve shifts to the right. D) the AD curve shifts to the left and the LRAS curve shifts to the right.