When an exchange rate is established as a fixed peg, active intervention may be required to maintain the target-pegged rate
a. True
b. False
Indicate whether the statement is true or false
True
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If a firm buys a delivery van for $18,000 and can resell it in 2 years for $7,500, the sunk cost is
A) $10,500. B) $7,500. C) $18,000. D) $0.
The resources that a taxpayer devotes to complying with the tax laws are a type of
a. marginal tax. b. administrative burden. c. deadweight loss. d. Both b and c are correct.
In a situation where there is no incentive to cut pollution because it will make domestic firms less competitive, it will improve world welfare if:
a. nations impose tariffs on polluters. b. there is an international agreement so that every nation regulates global pollutants and no firms have competitive advantages because of lax pollution laws. c. there is a ban on production until we can scientifically solve our pollution problems. d. we allow the market to work in this case.
Comparative advantage is the ability to
A) perform an activity at a lower opportunity cost. B) determine who your best trading partners are. C) determine the best use of capital goods. D) convince others of the best choices to make in their own self-interest.