Which of the following is NOT an assumption of the behavior of exchange rates in the short run?
a. The adjustment period of time involves weeks rather than years.
b. Market forces are irrelevant and "do not matter."
c. Prices of goods adjust slowly and are therefore "sticky."
d. Economic actors behave in their own self-interest.
Answer: b. Market forces are irrelevant and "do not matter."
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Refer to the table above. What is the average total cost of producing 160 units of the good?
A) $0.50 B) $0.93 C) $1.44 D) $2
If firms in a competitive price-searcher market are currently earning economic losses, then in the long run,
a. new firms will enter the market, and the current firms will experience a decrease in demand for their products until zero economic profit is again restored. b. new firms will enter the market, and the current firms will experience an increase in demand for their products until zero economic profit is again restored. c. some existing firms will exit the market, and the remaining firms will experience an increase in demand for their products until zero economic profit is again restored. d. some existing firms will exit the market, and the remaining firms will experience a decrease in demand for their products until zero economic profit is again restored.
Suppose that your neighbor smokes in his yard. You can smell his cigarette smoke from inside your house, and you dislike the smell. Which of the following statements is correct?
A. There is no efficient solution to this problem. B. If it is difficult for you and your neighbor to negotiate with each other, then you may not be able to arrive at an efficient solution to this problem. C. Since your neighbor has the legal right to smoke in his yard, you will not be able to arrive at an efficient solution to this problem. D. It not socially optimal for your neighbor to smoke in his yard.
In economics, the word "aggregate" refers to
A) the government. B) how individual households differ from each other. C) the public sector itself. D) an economy as a whole.