Why do people and firms in the United States supply dollars to the foreign exchange market?
What will be an ideal response?
People and firms supply dollars in order to obtain foreign currency with which to purchase foreign goods and services and/or foreign assets.
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What is a risk premium?
What will be an ideal response?
Refer to the table below. If the profit for each unit of paper product is $3.00 and the profit for each unit of lumber is $13.50, the profit-maximizing quantity of lumber and paper products is located between which to points on Big Oaks' production possibilities frontier?
Big Oaks can produce either paper products or lumber with each tree that they harvest. Because Big Oaks can adjust the amount of paper products and lumber they produce from the harvested trees, paper products and lumber are produced in variable proportions. The above table summarizes Big Oaks production possibilities from each harvested tree.
A) B and C
B) D and E
C) E and F
D) C and D
People (and all resources):
a. tend to specialize in those activities in which their opportunity costs are minimized. b. tend to specialize in those activities in which their opportunity costs are maximized. c. never consider opportunity costs before specializing in a particular activity. d. consider only direct costs while choosing to specialize in a particular activity. e. do not act in their own self-interest but specialize in those activities which benefit others.
A 10-cent-per-box tax on producers of cigars will
a. shift the firm's ATC and MC curves upward by the full amount of the tax. b. induce the firm to produce less but will not shift the firm's MC curve. c. shift the firm's ATC and MC curves downward by the full amount of the tax. d. shift the MC curve upward but will not cause any shift in the ATC curve.