Choice architects know that whether something feels like a loss or gain often depends on how:
A. it is framed.
B. often the decision is made.
C. it is structured in terms of time to make the decision.
D. large the outcome is.
A. it is framed.
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You have read about the so-called catch-up theory by economic historians, whereby nations that are further behind in per capita income grow faster subsequently. If this is true systematically, then eventually laggards will reach the leader
To put the theory to the test, you collect data on relative (to the United States) per capita income for two years, 1960 and 1990, for 24 OECD countries. You think of these countries as a population you want to describe, rather than a sample from which you want to infer behavior of a larger population. The relevant data for this question is as follows: where X1 and X2 are per capita income relative to the United States in 1960 and 1990 respectively, and Y is the average annual growth rate in X over the 1960-1990 period. Numbers in the last row represent sums of the columns above. (a) Calculate the variance and standard deviation of X1 and X2. For a catch-up effect to be present, what relationship must the two standard deviations show? Is this the case here? (b) Calculate the correlation between Y and . What sign must the correlation coefficient have for there to be evidence of a catch-up effect? Explain. What will be an ideal response?
What do you have to know to calculate the price elasticity of demand?
a. how much of the good was purchased at each of two different prices b. the price elasticity of supply c. how many firms supply the good d. the portion of income the typical consumer spends on the good
One piece of evidence that business fluctuations are caused by demand-side changes would be that
A. monetary and fiscal policy will move inversely. B. interest rates and budget deficits will move inversely. C. unemployment and inflation will move inversely. D. unemployment and budget deficits will move inversely.
While there is no specific number of firms that must dominate an industry before it is an oligopoly, the number of sellers characterizes an oligopoly when
A. there are more firms than a monopolistically competitive market. B. there is a sufficient number of firms to satisfy the market demand. C. the firms are so large relative to the total market that they can affect the market price. D. the firms are so small relative to the total market that they cannot affect the market price.