In Two-Good,one-Period Model,when the Terms of Trade Move Against You

question 48

Multiple Choice

In two-good,one-period model,when the terms of trade move against you,

• A) production of good a increases and consumption of good a decreases.
• B) production of good a increases and consumption of good a is ambiguous.
• C) production of good b increases and consumption of good a decreases.
• D) production of good b decreases and consumption of good a increases.
• E) production of good a is ambiguous and consumption of good a increases.

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Definitions:

Fundamental Attribution Error

The tendency to overestimate the influence of personality and underestimate the influence of situational factors in explaining other people's behavior.

Focus-of-Attention Bias

The tendency to pay more attention to certain stimuli or aspects of the environment over others, often affecting judgments and decisions.

Schema-Irrelevant

Information or stimuli that do not fit into an existing cognitive schema or framework, often requiring new schema to be developed or old ones to be modified.

Situational Attribution

A decision by an observer to attribute a behavior to environmental forces facing the person who performed it rather than to that person’s internal state. See also Dispositional attribution.