Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point A to Point E, the opportunity cost of motorcycles, measured in terms of hybrid cars
A. remains constant.
B. decreases.
C. initially increases, then decreases.
D. increases.
Answer: D
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In terms of exposing others to risk, explain if there is a difference between you choosing to text while driving
and a company selling tablet computers where the batteries have been known to explode when the tablet is left on for a long period of time.
The supply curve is influenced by
A) the income of consumers. B) the number of customers in the market. C) the prices of the inputs required to produce the product. D) the expectations of future profit.
An alternative to using simultaneous equation models with panel data is:
A. to use OLS estimates after first differencing the data. B. to use fixed effects transformation on the equations and then apply 2SLS. C. to convert the equations into reduced form and then apply feasible generalized least squares. D. to convert the equations into reduced form and then apply OLS.
If the fluctuations in the economy’s real growth rate from year to year are caused primarily by variations in the rate at which aggregate demand increases, then data would show
A. a cyclical relationship between inflation and unemployment. B. a direct relationship between inflation and unemployment. C. an inverse relationship between inflation and unemployment. D. no relationship between inflation and unemployment.