Suppose a technological advancement makes automobiles 50% safer, and at the same time, the prices of automobiles go up by 25%. Is this a pure price change?
A. Yes, because an improvement in quality has caused prices to rise.
B. No, because it is not possible to put a value on safety.
C. No, because an improvement in quality has caused prices to rise.
D. Yes, because the price has gone up.
Answer: C
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Under a fixed exchange rate system, the central bank of a country experiencing a balance of payments deficit will:
A) increase the supply of the domestic currency to prevent currency depreciation. B) increase the demand for the domestic currency to prevent currency depreciation. C) increase the supply of domestic currency to prevent a currency appreciation. D) increase the demand for domestic currency to prevent a currency appreciation.
If the government institutes a specific tax for a good
A) the producer simply passes the entire tax on to the consumer. B) the producer must absorb the entire tax. C) the producer can generally only pass part of the tax onto the consumer. D) the equilibrium price drops.
Average total cost exceeds average variable costs by the value of marginal cost
a. true b. false
Increased border patrol will affect the labor market in California. With a(n) ________ in labor supply, we would expect wages to ________.
A. decrease; increase B. decrease; decrease C. increase; decrease D. increase; increase