(Appendix) If the cost of search is $3, and wages are uniformly distributed between $20 and $50, what is the smallest wage you should accept if you are risk neutral?
A. 28.73
B. $36.58
C. $33.42
D. $46.58
Answer: B
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During the last decade, the price of a computer fell every year and the quantity sold increased every year. This experience suggests that the
A) "law of demand" was definitely contradicted. B) "law of supply" was definitely contradicted. C) demand curve shifted rightward. D) supply curve shifted rightward.
Which of the following is not appropriate, if we live in a world of fixed exchange rates?
A) monetary approach to the exchange rate B) elasticities approach C) monetary approach to the BOP D) absorption approach
Product innovation:
A. is accurately reflected in the basket of goods. B. is not an issue for the CPI since it uses a fixed basket of goods and services. C. doesn't cause the CPI to be overestimated. D. presents a problem for those calculating the CPI because they use a fixed basket of goods.
A French worker can produce either 4 barrels of wine or 16 shirts a week; and Italian worker can produce either 10 barrels of wine or 20 shirts a week.
A. After the countries begin to trade, one barrel of wine will cost between four and eight shirts. B. France has an absolute advantage in both wine and shirts. C. France will export shirts and import wine. D. France has an absolute advantage in making shirts.