Which of the following is an example of a third variable causing two other variables?
a. During a theatrical performance, the wind and flying kites both increased.
b. During a thunderstorm, felled trees and the sale of oranges both increased.
c. During a harsh winter, car accidents and heating bills both increased.
d. During an exciting Super Bowl game, heart attacks and snowfall both increased.
c. During a harsh winter, car accidents and heating bills both increased.
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Purchasing power parity does NOT provide accurate predictions of exchange rates because
A) almost all goods and services are traded across nations. B) governments currently fix exchange rates. C) firms are unable to set prices differently across nations. D) non-traded goods account for approximately 50 percent of the value of production in an economy.
In a monopolistically competitive market if the additional revenue generated from advertising equals the additional cost of advertising, the firm should
A) advertise more to increase sales. B) advertise more to lower marginal costs. C) maintain its current amount of advertising. D) advertise less to decrease costs.
If the government enacts contractionary fiscal policy, it could:
A. reduce its spending. B. decrease personal income taxes. C. decrease corporate income taxes. D. All of these are contractionary.
If a firm employs an extra unit of labor, the additional product generated by employing the extra unit of labor is
A. the diminished marginal product. B. the marginal physical product of labor. C. marginal revenue. D. total product.