The marginal rate of transformation from good X to good Y:
A. is the sum of a firm's marginal products.
B. is the ratio of a firm's marginal products.
C. is the product of a firm's marginal products.
D. is the difference between a firm's marginal products.
B. is the ratio of a firm's marginal products.
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Producing paper creates pollution. There is no externality in the consumption of paper. The efficient quantity of paper is when the
A) marginal social benefit of paper is equal to zero. B) marginal social cost of the pollution from making paper is equal to zero. C) marginal social benefit of paper is equal to the marginal social cost of paper. D) marginal private cost of the pollution from making paper is equal to zero.
Assumptions are necessary to
A) make economics a social science. B) define a set of circumstances where a model is most likely to apply. C) define the relationship between wants and resources under all circumstances. D) define the specific cause and effect relationship that is being explained by social sciences.
A study investigated the impact of house price appreciation on household mobility
The underlying idea was that if a house were viewed as one part of the household's portfolio, then changes in the value of the house, relative to other portfolio items, should result in investment decisions altering the current portfolio. Using 5,162 observations, the logit equation was estimated as shown in the table, where the limited dependent variable is one if the household moved in 1978 and is zero if the household did not move: Regression model Logit constant -3.323 (0.180) Male -0.567 (0.421) Black -0.954 (0.515) Married78 0.054 (0.412) marriage change 0.764 (0.416) A7983 -0257 (0.921) PURN -4.545 (3.354) Pseudo-R2 0.016 where male, black, married78, and marriage change are binary variables. They indicate, respectively, if the entity was a male-headed household, a black household, was married, and whether a change in marital status occurred between 1977 and 1978. A7983 is the appreciation rate for each house from 1979 to 1983 minus the SMSA-wide rate of appreciation for the same time period, and PNRN is a predicted appreciation rate for the unit minus the national average rate. (a) Interpret the results. Comment on the statistical significance of the coefficients. Do the slope coefficients lend themselves to easy interpretation? (b) The mean values for the regressors are as shown in the accompanying table. Variable Mean male 0.82 black 0.09 married78 0.78 marriage change 0.03 A7983 0.003 PNRN 0.007 Taking the coefficients at face value and using the sample means, calculate the probability of a household moving. (c) Given this probability, what would be the effect of a decrease in the predicted appreciation rate of 20 percent, that is A7983 = –0.20? What will be an ideal response?
For necessities, income elasticity is any value:
A. less than 0. B. between 0 and 1. C. greater than 1. D. greater than 0.