Refer to the information provided in Figure 34.2 below to answer the question(s) that follow.
Figure 34.2Refer to Figure 34.2. The dollar is currently at Point A. A decrease in the price level in the EU causes a movement to Point
A. E.
B. B.
C. C.
D. D.
Answer: D
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In regulated industries, the optimal regulation is to set price such that MC=P
a. True b. False Indicate whether the statement is true or false
An active deficit:
a. Is the portion of the government deficit that automatically helps a nation from falling further into a recession. b. Is always less than the actual deficit when a nation is currently below full employment. c. Is the difference between government spending and taxes at full employment. d. All of the above are true. e. None of the above is true.
Economists often evaluate a theory in terms of how consistently and accurately it predicts what happens. Implicit in this position is the belief that
A) if the theory's predictions are consistently accurate, then there is a fairly good chance that the theory is a good explanation of how things work. B) if the theory's predictions are consistently accurate, then there is a fairly good chance that the theory will be accepted by others. C) if the theory's predictions are consistently accurate, then there is a fairly good chance that the theory's assumptions (even if they initially seem unrealistic) capture something that is essential to explaining what it is that the theory is trying to explain. D) all of the above
Suppose Evan and Robert are each filling out a separate survey about parking on campus. On Evan's survey, the first question asks about whether he thinks the fine for parking illegally on campus should be $50, and on Robert's survey the first question asks about whether he thinks the fine should be $100. For both Evan and Robert, the second question asks how much each thinks the fine currently is. If Evan and Robert know nothing about the parking fines on campus, but each uses anchoring and adjustment to form his assessment, then, all else equal, you would expect:
A. Robert's estimate of the current fine to be higher than Evan's. B. Evan's estimate of the current fine to be higher than Robert's. C. their estimates to be identical. D. both of them to guess a number between $50 and $100.