Which of the following can policy do?
a. alter incentives
b. alter trade-offs
c. change opportunity costs
d. All of the above are correct.
d
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The demand for the Franconian franc in the foreign exchange market equals 14,000 - 3,000e and the supply of francs in the foreign exchange market equals 2,000 + 2,000e, where e is the nominal exchange rate expressed in U.S. dollars per franc. If the franc is fixed at 2 U.S. dollars per franc, then to maintain this fixed rate Franconia's international reserves must:
A. increase by 4,000 francs per period B. decrease by 4,000 francs per period C. increase by 2,000 francs per period D. decrease by 2,000 francs per period
When sellers have more information about hidden characteristics of a good than buyers have, more low-quality units are likely to be sold than high-quality units. This is
a. the law of diminishing marginal returns b. the law of natural selection c. the winner's curse d. the lemons problem e. the problem of common pools
Minimum efficient scale occurs at the smallest level of output at which a firm can minimize long-run average costs.
Answer the following statement true (T) or false (F)
The demand curve faced by a purely competitive firm:
A. Has unitary elasticity B. Yields constant total revenues even when price changes C. Is identical to the market demand curve D. Is the same as its marginal revenue curve