Daniel notices that every year with a mild winter, his roses begin to bloom in February, but every year with a severe winter, his roses do not begin to bloom until April. He concludes that the severity of the winter is responsible for the month in which his roses begin to bloom. Daniel is
A. probably misguided in that there is no apparent correlation or causation in this situation.
B. very probably correct in his conclusion that the severity of the winter is a cause of when his roses begin to bloom.
C. definitely confusing correlation with causation.
D. likely correct that there is causation, but the causation is more likely running in the opposite direction in that the initial blooming of his roses is the cause of the severity of the previous winter.
Answer: B
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Financial institutions for the poor have been neglected because
a. large banks considered rural branches to be unprofitable b. economists and others believed that poor people were unable to save c. the poor often save in non-monetary forms d. small farmers and business people were considered to be untrustworthy borrowers e. all of the above
Two-part tariffs allow the monopoly firm to capture all of the potential consumer surplus generated by the sale of its product
Indicate whether the statement is true or false
When a depreciation in the nation's real effective exchange rate initially lowers the trade balance and then increases it, economists refer to the phenomenon as:
a. the K-curve effect. b. the J-curve effect. c. the real balances effect. d. the marginal propensity to import.
Suppose that when a particular firm decreases its price its total revenue decreases. What kind of demand does this particular firm face?
A. Demand is price inelastic. B. Demand is price elastic. C. Demand is unit elastic. D. Demand is perfectly price elastic.