Câu hỏi đánh giá môn Kinh tế vĩ mô bằng tiếng Anh- Chương 1

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Câu hỏi đánh giá môn Kinh tế vĩ mô bằng tiếng Anh- Chương 1 Chapter 1: Preliminaries PART I INTRODUCTION:MARKETS AND PRICES CHAPTER 1 PRELIMINARIES 1 Chapter 1: Preliminaries QUESTIONS FOR REVIEW1. It is often said that a good theory is one that can be refuted by an empirical, data-oriented study. Explain why a theory that cannot be evaluated empirically is not agood theory. There are two steps to consider when evaluating a theory: first, you should examine the reasonability of the theory’s assumptions; second, you should test the theory’s predictions by comparing them with facts. If a theory cannot be tested, it cannot be accepted or rejected. Therefore, it contributes little to our understanding of reality.2. Which of the following two statements involves positive economic analysis andwhich normative? How do the two kinds of analysis differ?a. Gasoline rationing (allocating to each individual a maximum amount of gasoline that can be purchased each year) is a poor social policy because it interferes with the workings of the competitive market system. Positive economic analysis describes what is. Normative economic analysis describes what ought to be. Statement (a) merges both types of analysis. First, statement (a) makes a positive statement that gasoline rationing “interferes with the workings of the competitive market system.” We know from economic analysis that a constraint placed on supply will change the market equilibrium. Second, statement (a) makes the normative statement (i.e., a value judgment) that gasoline rationing is a “poor social policy.” Thus, statement (a) makes a normative comment based on a conclusion derived from positive economic analysis of the policy. 2 Chapter 1: Preliminariesb. Gasoline rationing is a policy under which more people are made worse off than are made better off. Statement (b) is positive because it states what the effect of gasoline rationing is without making a value judgment about the desirability of the rationing policy.3. Suppose the price of unleaded regular octane gasoline were 20 cents per gallonhigher in New Jersey than in Oklahoma. Do you think there would be anopportunity for arbitrage (i.e., that firms could buy gas in Oklahoma and then sell itat a profit in New Jersey)? Why or why not? Oklahoma and New Jersey represent separate geographic markets for gasoline because of high transportation costs. If transportation costs were zero, a price increase in New Jersey would prompt arbitrageurs to buy gasoline in Oklahoma and sell it in New Jersey. It is unlikely in this case that the 20 cents per gallon difference in costs would be high enough to create a profitable opportunity for arbitrage, given both transactions costs and transportation costs.4. In Example 1.3, what economic forces explain why the real price of eggs has fallenwhile the real price of a college education has increased? How have these changesaffected consumer choices? 3 Chapter 1: Preliminaries The price and quantity of goods (e.g., eggs) and services (e.g., a college education) are determined by the interaction of supply and demand. The real price of eggs fell from 1970 to 1985 because of either a reduction in demand (consumers switched to lower-cholesterol food), a reduction in production costs (improvements in egg production technology), or both. In response, the price of eggs relative to other foods decreased. The real price of a college education rose because of either an increase in demand (e.g., more people recognized the value of an education), an increase in the cost of education (e.g., increase in staff salaries), or both.5. Suppose that the Japanese yen rises against the U.S. dollar- that is, it will takemore dollars to buy any given amount of Japanese yen. Explain why this increasesimultaneously increases the real price of Japanese cars for U.S. consumers andlowers the real price of U.S. automobiles for Japanese consumers. As the value of the yen grows relative to the dollar, more dollars exchange for fewer yen. Assume that the costs of production for both Japanese and U.S. automobiles remain unchanged. Then using the new exchange rate, the purchase of a Japanese automobile priced in yen requires more dollars. Similarly, the purchase of a U.S. automobile priced in dollars requires fewer yen.6. The price of long-distance telephone service ...