When it is possible to trade two separate currencies for a common third currency, economists refer to profit opportunities as:
a. backward arbitrage.
b. speculation.
c. triangular arbitrage.
d. forced equilibrium.
Ans: c. triangular arbitrage.
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If market demand for solar panels is specified as QD = 100 – 2.5P, the vertical intercept of demand, as conventionally graphed, is
a. +100 b. –100 c. –2.5 d. +40
If the government wants to regulate a natural monopoly, it will force the firm to set price equal to
A) average cost. B) marginal cost. C) marginal revenue. D) None of the above.
Between 1820 and 1860, in the U.S.,
a. real wages rose. b. unskilled workers' earnings fell relative to skilled workers' earnings. c. fertility rates fell. d. the number of self-employed workers fell. e. All of the above.
A drought destroys much of the grape crop. As a result, consumer surplus in the market for wine:
a. decreases. b. increases. c. remains unchanged. d. depends on the deadweight loss.