A common approach that economists use to understand, explain and predict economic phenomena is to
A) form a theory or model.
B) conduct experiments in a science lab.
C) ask what people think.
D) examine people's thought processes.
A
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If a decrease in the price of movie tickets increases the total revenue of movie theaters, this is evidence that demand is:
a. price elastic. b. price inelastic. c. unit elastic with respect to price. d. perfectly inelastic.
When an economy is in a recession,
a. strong demand for investment funds will push interest rates upward. b. strong demand for resources will push the prices of resources upward. c. the real interest rate will tend to rise. d. the unemployment rate will rise above its natural rate.
In year 1 the CPI is 175, and in year 2 the CPI is 189. If Dennis's salary was $82,000 in year 1, what is the minimum salary he must earn in year 2 to "keep up with inflation"?
a. $83,550 b. $92,360 c. $85,750 d. $88,560
If the U.S. has a comparative advantage in almonds relative to Japan, we would expect that
A. the U.S. would export almonds to Japan and Japan would export almonds to the U.S. B. Japan would export almonds to the United States. C. the U.S. would export almonds to Japan. D. None of these situations would take place.