Answer the following statement(s) true (T) or false (F)
1. In a model that analyzes the effects of a tax change, the tax serves as an endogenous variable.
2. The embarrassment theory suggests why shopping carts should be smaller.
3. An economic model, even if unrealistic, is useful as long as it makes predictions that are realistic.
4. Efficiency is the only criterion by which economists judge policies.
5. All points on a risk-neutral individual's indifference curve have the same expected value.
1. False
2. False
3. True
4. False
5. True
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Ski resorts have begun to offer activities in the summer, like music festivals and mountain biking, rather than closing down the facilities for the season. This a good decision for a ski resort when
A. the extra revenue exceeds the variable costs of staying open during the summer. B. such activities draw an upscale set of customers. C. these activities reduce fixed costs. D. it provides employment for local residents.
This __________ declared that price discrimination is illegal especially when it decreases competition
a. Robinson-Patman Act b. Sherman Antitrust Act of 1890. c. Merger Act d. Federal Trade Commission Act.
If the FOMC orders a purchase of government securities from member banks, where does the FOMC get the money to pay for the securities?
a. It creates money to pay for the securities by adding the purchase amount to the banks' reserves. b. It pays for the securities with new Federal Reserve notes. c. It borrows the necessary funds from the Treasury. d. It auctions off part of the securities it already owns.
Current law regarding the Fed's Board of Governors stipulates that:
A. no more than three governors can come from the same district. B. no more than two governors can come from the same district. C. no more than one governor can come from the same district. D. every district must have at least one governor on the board.