Use the following graph, which shows the supply and demand curves for dollars in the pound/dollar market, to answer the next question.
Assume that D1 and S1 are the initial demand for and supply of dollars. Suppose that Britain's demand for dollars increases from D1 to D2. If the British government wishes to fix the exchange rate at the initial level, then it would be faced with a problem of ________.
A. rationing Q2 dollars among British importers who would like to acquire Q3 dollars
B. rationing Q3 dollars among British importers who would like to acquire Q2 dollars
C. deteriorating terms of trade
D. a rise in the pound price of dollars
Answer: A
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Use the following graph showing short-run cost curves for a perfectly competitive firm to answer the next question.
At what minimum price would the firm be willing to produce output in the short run?
A. P1 B. P2 C. P3 D. P4
Refer to Figure 2-8. What is the opportunity cost of producing 1 ton of coconuts in Guatemala?
A) 1/2 of a ton of pineapples B) 1 1/3 tons of pineapples C) 2 tons of pineapples D) 90 tons of pineapples
A decision maker can always make the best choice by:
A. including sunk costs as part of marginal costs. B. including sunk costs as part of total costs. C. ignoring sunk costs. D. subtracting sunk costs from total benefits.
Of the different types of businesses, a corporation has the ________ government rules and the ________ government regulations affecting it
A) least; least B) least; most C) most; least D) most; most