If your total liabilities are $1,250 and total assets are $750, what is your net worth?
a. -$500
b. $600
c. $650
d. $550
Answer: a. -$500
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For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese. Germany can produce one watch for every 100 pounds of cheese it produces. Which of the following is true with regard to opportunity costs in the two countries?
a. The opportunity cost of producing watches is higher in Denmark. b. The opportunity cost of producing cheese is higher in Denmark. c. The opportunity cost of producing cheese is identical in both countries. d. It is impossible to compare opportunity costs because the two countries use different currencies. e. In both countries combined, the opportunity cost of one watch is 150 pounds of cheese.
What is convergence hypothesis? Why should we expect convergence in the long run?
Suppose two companies, Macrosoft and Apricot, and considering whether to develop a new product, a touch-screen t-shirt. The payoffs to each of developing a touch-screen t-shirt depend upon the actions of the other, as shown in the payoff matrix below (the payoffs are given in millions of dollars). 
Suppose Apricot makes its decision first, and then Macrosoft makes its decision after seeing Apricot's choice. What will be the equilibrium outcome of this game?
A. Apricot will develop a touch-screen t-shirt, and Macrosoft will not. B. Macrosoft will develop a touch-screen t-shirt, and Apricot will not. C. Neither Apricot nor Macrosoft will develop a touch-screen t-shirt. D. Both Apricot and Macrosoft will develop a touch-screen t-shirt.
In the trade-based theory of exchange rate determination, the quantity supplied of a currency in the foreign exchange market results from
A) its exports of goods and services. B) the nation's demand for imports C) the level of domestic absorption. D) the import demand curve.