An economist at the University of Alaska at Anchorage has been asked to explain why the price of Alaskan crude oil has fallen recently. In order to assemble a scholarly answer, the professor should take which steps?
a. Develop a hypothesis, test the proposition by engaging in empirical analysis, and examine the data to see if it fits with the facts.
b. Gather data on crude oil prices and
seemingly unrelated variables in order to look for associations, then formulate a hypothesis based on those unexpected associations.
c. Ask people in Alaska why they are not purchasing oil.
d. None of the above. The oil industry is controlled by a cartel; therefore price changes in the industry cannot be explained using economic theories.
a
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In the case in Scenario 18.1, the Coase theorem specifies that
A) the result will be different if the fishermen are given the right to clean water than it will be if the factory is given the right to use the water as it sees fit, but the result will be inefficient in either case. B) the efficient result will occur whether the fishermen are given the right to clean water or the factory is given the right to use the water as it sees fit. C) economic efficiency requires that the fishermen be given the right to clean water. D) economic efficiency requires that no one may contaminate the water. E) economic efficiency requires that the fishermen be given the right to clean water and that the factory be given the right to use the water as it sees fit.
If Jim pays $1000 to John: a. GDP will increase by $1000
b. GDP will increase, but we cannot determine by what amount. c. nominal GDP will increase, but we cannot be sure if real GDP will increase or decrease. d. we need more information in order to determine whether or how much GDP will change.