A basic assumption used in many economic model is
A) as price goes up, the amount purchased will go up too.
B) as price goes up, less will be offered for sale on the market.
C) if the underlying theory doesn't represent reality, it is not useful.
D) ceteris paribus, which means all other things remain unchanged.
Answer : D) ceteris paribus, which means all other things remain unchanged.
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Which of the following statements is likely to be made by someone who believes in the new growth theory?
A) Population growth will limit long-run gains in real GDP per person. B) Competition will encourage discoveries of new ideas leading to greater economic growth. C) Choices made by human capital are likely to be inefficient. D) Economic growth will eventually slow. E) Although technological changes increase real GDP, these changes are random and unexplainable.
A bumper-to-bumper warranty on a used car is a signaling device that
A) identifies a high-quality car as a high-quality car, because putting such a warranty on a low-quality car would be prohibitively costly. B) disguises a low-quality car as a high-quality car, and thus makes it easier to sell. C) is necessary in order to sell a low-quality car at all. Without it no one would risk buying the car. D) isn't necessary if there is a mix of high-quality and low-quality cars in the market. E) helps sellers determine whether the buyer is truly looking for a high-quality car.
The H1B visa program is designed:
a. to keep out undocumented workers. b. to encourage bright U.S. college students to study abroad. c. to attract scientists and engineers from other nations to help U.S. industry prosper. d. to have a way to force foreign students to go back to their native lands after graduation.
Marv Pilson has $50 worth of groceries in a shopping cart at his local Shop 'n Save. Assume that the marginal utility per dollar of the liter bottles of soft drink in Marv's cart equals 50. The marginal utility per dollar of the boxes of cereal in Marv's
cart equals 20. Marv has only $50 to spend, but has not yet paid for his groceries. How can Marv increase his total utility without spending more than $50? A) Marv should substitute his favorite soft drink or the cereal in his cart for generic brands that have lower prices. B) Marv should buy more boxes of cereal and fewer bottles of soft drink. C) Marv should buy fewer boxes of cereal and more bottles of soft drink. D) Marv should buy fewer boxes of cereal and fewer bottles of soft drink. He can then spend more on other items.