Economic reasoning is based on the premise that:
a. all decisions or actions are costless
b. only non-economic decisions or actions have a cost associated with them.
c. only economic decisions or actions have a cost associated with them.
d. all decisions and actions have a cost associated with them.
d
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Substitution effects help explain the slope of the aggregate demand curve. One substitution effect refers to the
A) inverse relationship between the interest rate and the price level. B) direct relationship between the interest rate and the real value of wealth. C) effect on investment expenditures that result from a change in interest rates produced by a change in the price level. D) change in wealth that results from a change in the interest rate.
A specified amount of a claim that the insurance company does not need to pay is called:
A) coinsurance B) deductible C) copayments D) premium
All of the following are ways for market participants to overcome adverse selection except for which one?
A) profit-sharing B) screening C) certification D) signaling
An example of infant industry protection is the computer industry in Brazil from 1977 to 1988. It is widely concluded that the effort was:
a. a failure. b. a complete success, because now Brazil manufactures nearly all computer CPUs. c. successful, although there were costs to pay in higher prices, making PCs unattainable for most Brazilian consumers. d. as measured on a cost-benefit basis, still unclear due to potential future gains.