The idea that similar foreign and domestic goods, or baskets of goods, should have the same price when priced in terms of the same currency is called
A) equity.
B) purchasing power parity.
C) efficiency.
D) the tragedy of the commons.
B
You might also like to view...
Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed below.CustomerReservation Price($/Rental)A22B16C12D8E6F4 Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island bikes can charge a different price in the morning and in the afternoon, then in the morning, it will rent out ________ bike(s) and charge ________ per bike.
A. 4; $8 B. 1; $22 C. 2; $16 D. 3; $12
Club goods differ from pure private goods in that
A) club goods are nonexcludable while pure private goods are excludable. B) club goods are excludable while pure private goods are nonexcludable. C) club goods are nonrival while pure private goods are rival. D) club goods are nonexcludable while pure private goods are excludable.
The basic assumption behind the J-curve effect is that
A) supply and demand for currencies are less elastic in the short run than in the long run. B) in the short run, supply will exceed demand; in the long run, they will be equal. C) an overshooting effect occurs as people adjust to the new information. D) investors tend to be overly cautious in currency instruments.
A consumer's optimal choice is affected by income, prices of goods, and preferences
a. True b. False Indicate whether the statement is true or false