Which of the following metaphors best expresses the scientific nature of economic theory?
A) like a wool sweater, economic theory warms the heart of the economist.
B) like a pair of eyeglasses, economic theory allows one to more clearly see and discriminate among the countless facts he or she faces.
C) like a gun, economic theory shoots holes through every other rival theory.
D) like a bank, economic theory is concerned with only one thing: the accumulation of money.
B
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In any subgame perfect equilibrium to an infinitely repeated Prisoners' Dilemma game, the players will end up cooperating.
Answer the following statement true (T) or false (F)
National output and national income are the same because
A) one seller's profit is another seller's loss. B) one seller's profit is another buyer's loss. C) the sale of goods and services generates income for the sellers. D) the sale of goods and services generates tax revenues for the government.
When marginal cost is greater than average cost, average cost decreases as output increases
Indicate whether the statement is true or false
If Callum is consuming his utility maximizing bundle and the price of one good rises, what happens to the marginal utility per dollar spent on this good (MU/P), and what should Callum do?
A) MU/P has increased and Callum should buy less of this good. B) MU/P has decreased and Callum should buy less of this good. C) MU/P has increased and Callum should buy more of this good. D) MU/P has decreased and Callum should buy more of this good.