Which of the following is not an example of a natural experiment an economist might use to evaluate a theory?
a. Transit ridership increased in Atlanta following an increase in gas prices.
b. Federal tax revenue increased following a decrease in the tax rate.
c. Students in a principles of microeconomics course are asked to play a game with classmates to determine what decisions they make under certain circumstances.
d. Following the imposition of austerity measures, the growth rate of the economy in Greece slowed.
c
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Carlos has been invited to go skiing for the afternoon with his friends. It will cost $40 for a lift ticket. It is likely Carlos will:
A. overvalue the benefit of skiing. B. undervalue the opportunity cost of his afternoon. C. find it difficult to place a value on what he might do instead of skiing. D. All of these are true.
If the market interest rate is 5 percent, the opportunity cost of $100 worth of present consumption
a. is $105 today b. is $105 next year c. is $5 today d. is $5 next year e. cannot be determined unless we know the consumer's rate of time preference
Accurate measurement of GDP is important to business decision-makers because this information will help them better determine the
a. general happiness of a country's citizens. b. course of the economy and the direction of demand for their products. c. economic well-being of a particular group within a country. d. amount of leisure time available and the quality of life in a country.
Assume nominal GDP is $10,000 trillion in period 1 and $15,000 trillion in period 2. If prices in period 2 are twice as high as in period 1, real GDP in period 2 is
A. $15,000 trillion measured in period 1 prices. B. $12,500 trillion measured in period 1 prices. C. $10,000 trillion measured in period 1 prices. D. $7,500 trillion measured in period 1 prices.