Which of the following is an example of an external cost?
A. the opportunity cost of getting a college education
B. the cost of tires for your car
C. the cost of labor to a firm
D. the pollution caused by automobile exhaust
Answer: D
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Under fixed exchange rate, in general
A) the domestic and foreign interest rates are equal, R = R . B) R = R + (Ee - E)/E. C) the foreign and domestic interest rates are unequal. D) the expected rate of domestic currency depreciation is high. E) the expected rate of currency depreciation is one.
All of the following utility functions rank bundles (q1,q2 ) in the same order except for which one?
A) q11/2 + q21/2 B) q11/2 q21/2 C) ln(q1 ) + ln(q2 ) D) All of the above rank bundles (q1,q2 ) in the same order
What can account for the negative slope of the marginal revenue product curve?
A) Diminishing marginal utility B) Diminishing marginal returns C) Monopsony power D) All workers eventually begin slacking. E) none of the above
A country with an overvalued currency
a. will have a balance of payments deficit. b. will suffer losses of foreign reserves. c. must intervene in the foreign exchange market to buy its own currency. d. All of the above are correct.