Draw a two period budget line where the borrow/lending rate of interest, r, allows consumers to choose consumption in each of the two periods. C1 and C2 given their anticipated income on two periods, Y1 and Y2 . The slope is
a. r
b. ?r
c. 1 + r
d. ?(1 + r)
d
You might also like to view...
According to your text, which group of scientists are completely free from biases?
A) Physicists B) Biologists C) Economists D) All of the above. E) None of the above.
Farmers who purchase insurance against crop failures tend to be pooled with farmers far away. Why might this be the case?
A) The weather in a single geographic area represents idiosyncratic risk, which is diversifiable. B) The weather in a single geographic area represents systematic risk, which is not diversifiable. C) The weather in far-flung geographic areas represents systematic risk, which is not diversifiable. D) The weather in far-flung geographic areas are commonly positively correlated.
The statement, "John buys more of good X as his income increases, ceteris paribus," means
a. John's income is being held constant. b. John's purchases of good X are being held constant. c. John's income and purchases of this good are being held constant. d. John's income is the only influence that is being allowed to change. e. the price of this good is being allowed to change.
A student noted that the football team won by a larger margin when the third-string played more minutes. Therefore, he recommended that the third-stringers become the first team. His conclusion was probably erroneous because he
a. confused positive and normative analysis. b. committed the fallacy of composition. c. failed to recognize that association is not causation. d. confused macroeconomics with microeconomics.