Which of the following situations is least likely to involve strategic interaction?
A) two countries deciding whether to impose trade restrictions on each other
B) competing convenience stores deciding how much to charge for coffee
C) two customers deciding which toaster to buy from Target
D) a state legislature deciding whether to legalize casino gambling
C
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Refer to the figure above. If the yuan is allowed to float, at exchange rates above E yuan per dollar:
A) the excess supply of dollars in exchange for yuan increases the value of the dollar in the foreign exchange market. B) the excess supply of dollars in exchange for yuan lowers the value of the dollar in the foreign exchange market. C) the excess demand for dollars in exchange for yuan lowers the value of the dollar in the foreign exchange market. D) the excess demand for dollars in exchange for yuan increases the value of the dollar in the foreign exchange market.
The empirical data indicate that in the short run exchange rates are much more variable than inflation differentials
Indicate whether the statement is true or false
The demand for a product is likely to be more elastic:
a. the smaller the share of the total budget spent on the product. b. when more complementary products are available. c. in the short run than in the long run. d. when more good substitutes for the product are available.
The use of large amounts of labor relative to capital in an economy indicates: a. labor-intensive production
b. capital-intensive production. c. that wage rates will be relatively high. d. that hand-made goods are of better quality than machine-made goods.