The Rise in the Value of the Dollar Between 1985

question 21

Multiple Choice

The rise in the value of the dollar between 1985 and 1988

• A) gave U.S. goods a competitive advantage over others.
• B) made imports relatively cheap.
• C) gave U.S. goods a comparative advantage over others.
• D) made imports expensive.

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Definitions:

Weak Axiom

In economic theory, a principle stating that if a consumer prefers bundle A to bundle B, then they will not prefer B to A when prices change, keeping income constant.

Revealed Preference

A theory suggesting that consumers' preferences can be determined by observing their purchasing behavior and the choices they make among different goods.

Weak Axiom

In the context of consumer choice theory, it is a postulate stating that if a consumer prefers bundle A over bundle B when both are affordable, then she will not choose B when A becomes more affordable.

Revealed Preferences

The theory that consumers' preferences can be determined by their purchasing habits and behavior rather than through their expressed desires or responses to surveys.