Leaving a handsome tip for the waiter in full view of your dinner date is a
a. Screening mechanism
b. Signaling mechanism
c. Way to waste money
d. None of the above
b
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An official settlements account balance of -$5,000 means
A) official reserves of foreign currency increased by $5,000. B) official reserves of foreign currency decreased by $5,000. C) the country is exporting more than it is importing. D) the country is importing more than it is exporting.
A production possibilities frontier with a bowed-outward shape indicates
A) the possibility of inefficient production. B) increasing opportunity costs as more and more of one good is produced. C) decreasing opportunity costs as more and more of one good is produced. D) constant opportunity costs as more and more of one good is produced.
Choose the statement that is correct.
A. The ability-to-pay principle can justify high fuel taxes to pay for freeways and high taxes on alcoholic beverages and tobacco products to pay for public health care. B. The ability-to-pay principle results in a tax system that is efficient and fair. C. The benefits principle is a fair arrangement because it means that those who benefit most pay the most taxes. D. The benefits principle results in a tax system that is efficient and fair.
In Figure 6.2, the price is $20 and the shaded area represents:
A. producer surplus. B. consumer surplus. C. market equilibrium. D. a price ceiling.