A widget costs $50 in the US and CAD$53 in Canada. The current exchange rate is 1USD=1.09CAD. At this rate,
a. The good costs more in the US
b. The good costs more in Canada
c. The good costs the same across the two countries
d. None of the above
a
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The short run for the industry is defined as a period
A. too brief for new firms to enter the industry. B. too brief for old firms to leave the industry. C. in which the number of firms in the industry is fixed. D. All of the responses are correct.
Demand for a good is inelastic if:
A. total revenue decreases when price decreases. B. the quantity effect outweighs the price effect of a price increase. C. the absolute value of price elasticity is greater than 1. D. None of these is true.
A shoe salesman working on commission must decide whether to work hard or shirk. Working hard would increase the probability of a sale from 20% to 70% but would cost him $5 . If the average price of shoes is $100, what is the minimum commission rate would induce him to work hard?
a. 4% b. 6% c. 8% d. 10%
If the Fed conducted an open market sale of government bonds and raised the discount rate: a. the money supply would increase
b. the money supply would decrease. c. the money supply would not change. d. the money supply could either increase or decrease.