For most practical matters, economists assume that
A) individuals are risk neutral.
B) individuals are risk lovers.
C) individuals are risk averse.
D) most individuals are risk lovers.
E) most individuals are risk neutral.
C
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Measuring the impact of a quota or tariff on the U.S. economy is an example of ________. Stating that a quota or tariff should be eliminated is an example of ________
A) econometric analysis; protectionism B) positive analysis; normative analysis C) statistical analysis; economic analysis D) trade analysis; an opinion
Knowing that the presence of externalities reduces surplus, it implies that:
A. there are mutually beneficial trades waiting to be exploited so private parties have an incentive to solve the externality problem themselves. B. government needs to find them and correct the market. C. there are mutually beneficial trades waiting to be exploited, so government has an incentive to force those parties to solve the problem themselves. D. None of these statements is true.
Loopholes have the effect of
a. encouraging particular patterns of behavior and favoring particular types of people. b. eroding the progressivity of the income tax. c. altering the pattern of economic incentives. d. All of the above are correct.
Economist Charles Kindleberger (a proponent of fixed exchange rates mentioned in the text) would agree with which of the following statements?
A) It is better to leave the international value of the domestic currency to the free market forces than to have to sacrifice domestic economic goals in order to support a certain predetermined value of the currency. B) There is too great a chance that the supported exchange rates will diverge significantly from the equilibrium exchange rates, which would create persistent problems and lead to an overall decrease in international trade. C) With no certainty of what one nation's currency will be worth in terms of other nations' currencies, international trade is held below what it could be. D) a and b