At an exchange rate of $1 = €1 in Figure 36.1, there is
A. A surplus of dollars.
B. Equilibrium in the foreign exchange market.
C. a shortage of dollars.
D. A shortage of euros.
Answer: C
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In the market for a particular pair of shoes, Jena is willing to pay $75 for a pair while Jane is willing to pay $85 for a pair. The actual price that each has to pay for a pair of shoes is $65. What is the combined amount of consumer surplus for Jena and Jane?
A. $215. B. $130. C. $10. D. $30.
Government mandated safety standard within firms
A) will always decrease efficiency. B) can increase efficiency by avoiding a prisoner's dilemma outcome. C) are unnecessary because of asymmetric information. D) will create unfair competition among firms.
The above figure shows the market for rice in Japan. SDomestic represents the domestic supply curve, and Sworld represents the world supply curve. If imported rice is banned, the consumption distortion loss is equal to
A) a + b + c + d. B) a + b + c + d + f + g. C) f + g. D) a + c + f + g.
The misperceptions theory of short-run aggregate supply curve says that quantity of output will decrease if the price level
a. decreases by more than expected so that firms believe the relative price of their output has decreased. b. decreases by more than expected so that firms believe the relative price of their output has increased. c. decreases by less than expected so that firms believe the relative price of their output has decreased. d. decreases by less than expected so that firms believe the relative price of their output has increased.