Exam 20: International Trade

Economists often evaluate a theory in terms of how consistently and accurately it predicts what happens.Implicit in this position is the belief that

Identify and describe each step of the five-step process outlined in the textbook for building and testing theories.

"The theory's predictions are consistent with what I believe,so now I have good reason to believe what the theory says." This statement is likely to have been made by a person who believes that

A person tends to be ______________ likely to lose her temper with a boss than with a friend because the opportunity cost of losing her temper with her boss tends to be _____________ than the opportunity cost of losing her temper with her friend.

It often appears as if there are "too few" workers at the Department of Motor Vehicles (DMV)to service all of its customers at a given point in time.Based on one of theories discussed in the textbook,this is probably because

For every gift that A gives to B from the first to the tenth gift,A receives a net benefit of $10.The additional cost to A of giving an additional gift is constant at $5.It follows that A's marginal benefit curve for giving gifts to B is ___________________ (assuming that we place "marginal benefits" on the vertical axis and "number of gifts" on the horizontal axis).

The _________________ the opportunity cost of bad behavior,the _________________ likely one is to exhibit bad behavior.

In general,in a given rich country the ______________ the opportunity cost for a woman of having and raising a child,the _____________ children she will have.

Theory A predicts that the higher the opportunity cost of having a child,the fewer children a woman will have.Which of the following is evidence against the theory if opportunity cost is measured in terms of foregone salary?

Anna gives Billy a gift of $200.We can be sure that Billy will

If a theory gives a scientist results that she does not want,then she should not believe in that theory.

Universities A and B are substitutes in the minds of many college students.Initially the student tuition at each university is the same and far below the equilibrium tuition.Then,the tuition at A is raised and B is not.As a result of a rising tuition at A,some students who would have applied and enrolled in A,apply to B instead.Based on the logic presented in one of the theories discussed in the textbook,we would expect that

If a person gives a gift to another person,an economist would say that it is because

Adrian reads about two theories,A and B.Theory A seems wrong to Adrian and theory B seems correct to Adrian.It follows that

The higher the cost of talking on a cell phone in public (in terms of being perceived by others as rude)the less likely one is to do so.

To an economist,it is preferable to

A man moves from a large city to a small town.In the small town he seems like a very different person than the person he was in the big city.For instance,he is more polite in the small town than he was in the big city.This could be because

Theory B predicts that everything that happens,happens for a reason - although we may not know what the reason is.This theory

In general,a dry cleaner in a small town is ______________ likely to be unethical in his business practices than a dry cleaner in a large city.This is because the larger a percentage of the population one person is,the _____________likely that person will have to further engage with people he encounters.

House A has an ocean view and House B does not.In all other respects,the two houses are the same.The market price of house A is $2,800,000; the market price of house B is $2,600,000.The ocean view is therefore valued at