Whenever marginal cost is below average cost, average cost must fall as output increases
a. True
b. False
A
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In the prisoners' dilemma game, each player
A) has only one possible strategy. B) can choose from two strategies. C) can choose from three strategies. D) can choose from four strategies.
Which of the following is an important assumption about the labor market that is shared by both the original Keynesian model and the Friedman "Fooling Model?"
A) The supply of labor depends on expected real wages. B) The demand for labor is a function of nominal wages. C) Workers can be "off" their labor supply function in the short-run equilibrium. D) Firms can be "off" their labor demand function in the short-run equilibrium.
If the nation's investment opportunities are highly attractive relative to those available abroad, the nation will tend to
a. experience an outflow of capital and a trade deficit. b. experience an outflow of capital and a trade surplus. c. experience an inflow of capital and a trade deficit. d. experience an inflow of capital and a trade surplus.
Juan works at Texas Burgers in El Paso and earns $8.00 per hour. His twin brother Felipe works in Mexico Burgers in Ciudad Juarez just across the border and earns $3.00 per hour for exactly the same work. An economist looking at this situation sees:
A. an incentive for Felipe to quit and find another job in Mexico. B. an incentive for Felipe to cross the border to get a job and thus reduce the gap. C. evidence that the law of one price has no support in the real world. D. the tendency of the rich to get richer and the poor to get poorer, widening the gap.