The supply of dollars in foreign exchange markets is
A) determined by the Federal Reserve's Board of Governors.
B) determined by the demand for U.S. goods.
C) determined by the U.S. demand for foreign goods.
D) a function of the international banking system.
Answer: C
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Suppose a perfectly competitive firm faces the following cost and revenue conditions: ATC = $25.50; AVC = $20.50; MC = $25.50; MR = $28.50. The firm should
A. shut down. B. continue to produce its current output. C. increase output. D. decrease output.
With a proportional tax, higher-income persons will pay:
A. The same amount of taxes as lower-income persons B. A bigger amount in taxes compared to lower-income persons C. A higher proportion of their income in taxes than lower-income persons D. A higher marginal tax rate as their incomes rise
If penalties for trading illegal drugs are instituted on both buyers and sellers, the
A) quantity might increase or decrease but the price will rise. B) price might rise or fall, but the quantity will decrease. C) price and the quantity will both decrease. D) price and the quantity will both increase.
When economists use the term "factors of production," they mean
a. labor, capital, and money b. labor, capital, land and money c. labor, capital, land and entrepreneurship d. labor, land, money and entrepreneurship e. money and entrepreneurship