In the diagram above, at the market equilibrium price, what is the consumer surplus?
a. A
b. B
c. C
d. D
e. none of the above
a. A
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Suppose the nominal wages of workers in an economy increase by 7 percent while the price level rises by 5 percent. The real wages:
a. would increase by about 2 percent. b. would decrease by about 5 percent. c. would increase by about 50 percent. d. would increase by about 10 percent. e. would decrease by about 25 percent.
Suppose that someone makes the argument that because empty alcohol containers are found at many accidents, the containers cause accidents. This would be an example of
a. sound logic. b. reverse causality. c. omitted variables. d. bias.
Use the following graph to answer the next question.
Assume that Japan and the United States are engaged in a system of flexible exchange rates. If more Japanese tourists decide to visit the United States for their vacations, the yen will ________ and the U.S. dollar will ________.
A. depreciate; depreciate B. depreciate; appreciate C. appreciate; depreciate D. appreciate; appreciate
A risk-neutral individual will make investment decisions purely based on net present value because
A) she doesn't care about utility. B) because utility is a linear function of wealth. C) she loves to take risk. D) net present value is always more than expected utility.