A couple is considering moving to Tampa from Chicago. The cost of moving for Crystal is $300 while the cost of moving for Amelia is $600. Crystal earns $500 in Chicago and $550 in Tampa. Amelia earns $200 in Chicago and $1000 in Tampa. Will they move as a couple?
A. Yes, because the joint cost of moving ($900) exceeds what they could earn in Chicago ($700).
B. No, because neither person would choose to move to Tampa on their own.
C. Yes, because they receive a net gain of $150 by moving to Tampa.
D. No, because they would lose $50 by moving to Tampa when all benefits and costs are considered.
E. Yes, because they would earn $1,550 in Tampa but only $700 in Chicago.
Answer: D
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(a) unanticipated changes, such as in terms of trade. (b) corruption of government officials. (c) foreign firms are less subject to the constraints of the plan than domestic ones. (d) all of the above. (e) none of the above.
An increase in the wage rate will have a greater effect on average costs
a. the larger the proportion labor costs are of total costs and the easier it is to substitute capital for labor. b. the larger the proportion labor costs are of total costs and the harder it is to substitute capital for labor. c. the greater is the diminishing marginal product of labor. d. the greater are returns to scale.
In the vertical segment of the aggregate supply curve,
a. real GDP increases with increasing unemployment b. competition among producers for already-employed resources forces the price level downward c. the economy is at full employment d. producers are able to hire more workers at lower wages e. increases in real GDP come only at the expense of higher price levels
If the interest rate of a foreign country is less than that of the domestic country, then the foreign country should have a positive forward premium on its currency.
Answer the following statement true (T) or false (F)