A decrease in income will cause a consumer's budget constraint to
a. shift outward, parallel to its initial position.
b. shift inward, parallel to its initial position.
c. pivot along the horizontal axis.
d. pivot along the vertical axis.
b
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Suppose a U.S.-made machine costs $500 and the exchange rate is 100 yen = $1 . A Japanese citizen purchasing this machine would pay:
a. 100 yen. b. 500 yen. c. 5,000 yen. d. 10,000 yen. e. 50,000 yen.
Under the gold standard, because all currencies had values fixed in units of gold
A) exchange rates were effectively fixed. B) there were no exchange rates. C) exchange rates were set to a crawling peg. D) none of the above
In the figure above, using the midpoint method, the price elasticity of demand when the price falls from $8 to $7 is equal to
A) 2.50. B) 1.63. C) 0.40. D) 0.62. E) 1.00.
In order for a taxicab to be operated in New York City, it must have a medallion on its hood. Medallions are expensive, but can be resold, and are therefore an example of
A) a fixed cost. B) a variable cost. C) an implicit cost. D) an opportunity cost. E) a sunk cost.