Figure 18-1
illustrates supply and demand for U.S. dollars and British pounds in the foreign exchange market. If the dollar price of pounds is $1.20, which of the following is true?
a.
There is an excess supply of pounds, and the dollar price of pounds will rise.
b.
There is an excess demand for pounds, and the dollar price of pounds will rise.
c.
There is an excess supply of pounds, and the dollar price of pounds will fall.
d.
There is an excess demand for pounds, and the dollar price of pounds will fall.
b
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Suppose a duopoly had reached the monopoly outcome and then the first firm increased its production. If the second firm next increases its production, the second firm's profit ________ and the first firm's profit ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases E) increases; does not change
Which of the following is not true about the marginal propensity to consume?
A. It is equal to the slope of the consumption function. B. It is equal to the change in consumption divided by the change in disposable income. C. It is always equal to or greater than 1. D. It is equal to 1 - MPS.
For a typical firm, the portion of the AC curve that is downward-sloping is because production
A. exhibits decreasing returns to scale. B. creates innovative technological progress. C. economies of scale. D. exhibits rising total product.
Give an example of a tax system where the marginal tax rate would equal the average tax rate