Scarcity applies to decision makers in macroeconomics but not in microeconomics
a. True
b. False
Indicate whether the statement is true or false
False
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If Tom can wax a car in fewer hours than Jerry, then Tom definitely has
A) a comparative advantage in car waxing. B) an absolute advantage in car waxing. C) both a comparative and an absolute advantage in car waxing. D) neither a comparative nor an absolute advantage in car waxing. E) an undetermined advantage because we do not know how long it takes Tom and Jerry to wash a car.
Consider two alternative worlds: (i) the world works according the real business cycle model, and the central bank acts to stabilize the price level; (ii) the world works according to the New Keynesian sticky price model, and the central bank acts to
make the output gap zero. Which is correct? A) We would prefer to live in world (ii). B) We would prefer to live in world (i). C) The data cannot tell us whether we are living in world (i) or world (ii). D) in either world, the central bank is irrelevant.
The cross-price elasticity of demand for coffee and coffee-cream is likely to be
A) greater than zero. B) less than zero. C) zero. D) infinity.
Whenever a country has an absolute advantage in the production of a good, that implies that the country should specialize in the production of that good
a. True b. False Indicate whether the statement is true or false