The rapid depreciation in the dollar from 1985 to 1987 caused net exports during this period
A. to fall as the J curve would have predicted, but with a short lag (less than one year).
B. to fall as the J curve would have predicted, but with a long lag (more than one year).
C. to rise as the J curve would have predicted, but with a short lag (less than one year).
D. to rise as the J curve would have predicted, but with a long lag (more than one year).
Answer: D
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The above figure shows supply and demand curves for milk. If the government passes a law that establishes $3 per month as the legal minimum per gallon price, consumer surplus will be
A) a. B) a + b + f. C) a + b + c. D) c + d + g.
A Pigovian tax is a tax:
A. meant to counter the effect of a negative externality. B. that increases efficiency in a market. C. that increases total surplus in a market. D. All of these statements are true.
Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfare is $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1,400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfare is $450. If the Chicago-Atlanta round-trip air fare were $350, should you use the coupon to go to Miami?
A. No, your economic surplus would be -$100. B. Yes, your economic surplus would be $50. C. Yes, your economic surplus would be $400. D. No, your economic surplus would be -$50.
Liberal and conservative economists agree more often on policy prescriptions than most noneconomists think they do.
Answer the following statement true (T) or false (F)