Suppose that the exchange rate between the U.S. dollar and the Mexican peso starts out at $0.11 per peso. If the exchange rate then changes to $0.08 per peso, there will be a(n) __________ in the quantity demanded of dollars by Mexicans, and therefore there will be a(n) __________ in the quantity supplied of pesos to the foreign exchange market
A) decrease; decrease
B) decrease; increase
C) increase; decrease
D) increase; increase
A
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In late 2008, the average risk premium rose because
A) investors feared a revival of inflation. B) large tax increases in the United States reduced corporate profits and led to fears of increased defaults. C) of the financial crisis. D) of fraud in the market for municipal bonds.
The marginal cost curve:
A. is U-shaped. B. rises when marginal product falls, and falls when marginal product rises. C. intersects ATC at the average total cost curve's minimum. D. All of these are true.
If price falls from $100 to $99 and quantity demanded rises from 2 to 3, the price elasticity of demand is
A. 0.03. B. 1.75. C. 25.7. D. 39.8.
To an economist, a free rider is a person who
A) uses private goods without paying for them. B) benefits from consuming public goods without paying for them. C) consumes demerit goods. D) uses the public transportation system without paying for it.