The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing rice, exporting steel, and neither importing nor exporting TVs. We can conclude that producer surplus in Aquilonia is now
a. higher in the steel market, lower in the rice market, and unchanged in the TV market.
b. higher in the rice and steel markets, and unchanged in the TV market.
c. lower in the rice and TV markets, and higher in the steel market.
d. lower in the rice and steel markets, and the same in the TV market.
a
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Assume you are holding Treasury securities and have sold futures to hedge against interest-rate risk. If interest rates fall
A) the increase in the value of the securities equals the decrease in the value of the futures contracts. B) the decrease in the value of the securities equals the increase in the value of the futures contracts. C) both the securities and the futures contracts decrease in value. D) both the securities and the futures contracts increase in value.
In perfectly competitive markets, firms operate where MC = MR and because of this, they are not making any economic profit.
Answer the following statement true (T) or false (F)
Suppose Bev's Bags makes large handbags and small handbags. They sold 70,000 large bags for $45 each and 25,000 small bags for $15 each. If the company had total costs of $2,000,000, what was the profit for this company?
A. $1,525,000 B. $3,525,000 C. $375,000 D. $850,000
Even though households may have unlimited wants, they have to allocate their spending carefully because they
a. do not want their credit card bills to be too high b. worry about their taxes c. have limited intelligence d. have limited incomes e. basically want to become wealthy