If the demand curve for hamburgers is downward sloping and the supply curve for hamburgers is upward sloping, then a tax imposed on hamburgers ________ the price paid by buyers and ________ the price received by sellers.
A) lowers; lowers
B) raises; raises
C) raises; lowers
D) lowers; raises
E) does not change; does not change
Ans: C) raises; lowers
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Sensible buyers or sellers will want to continue acquiring information
A) as long as the additional information extends their choices. B) as long as the anticipated additional benefit exceeds the additional cost of doing so. C) as long as they can be assured of acquiring correct information. D) indefinitely, because more information is better than less.
Suppose our firm produces chartered business flights with capital (planes) and labor (pilots) in fixed proportion (i.e., one pilot for each plane)
If the wage rate paid to the pilots increases relative to the rental rate of capital for the airplanes, then: A) the optimal capital-labor ratio should increase. B) the optimal capital-labor ratio should decrease. C) the optimal capital-labor ratio remains the same. D) We do not have enough information to answer this question.
A VAR allows you to test joint hypothesis that involve restrictions across multiple equations by
A) computing a z-statistic. B) computing the BIC but not the AIC. C) using a stability test. D) computing an F-statistic.
If the nominal interest rate is 3% and the inflation rate is 6%, the real interest rate is
a. 2% b. 3% c. -3% d. 9%