Refer to the information provided in Figure 7.8 below to answer the question(s) that follow. 
Figure 7.8Refer to Figure 7.8. The firm is currently along isocost CE. If the price of capital is $24, then the price of labor is
A. $16.
B. $24.
C. $80.
D. $120.
Answer: A
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Refer to Scenario 2 . What happens to the relative income distribution between the two countries under the conditions in the previous question? Explain
What will be an ideal response?
Economists normally
a. do not try to explain people's tastes, but they do try to explain what happens when tastes change. b. believe that they must be able to explain people's tastes in order to explain what happens when tastes change. c. do not believe that people's tastes determine demand, so they ignore the subject of tastes. d. incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements.
With reference to the graph above, if the intended aim of the price ceiling set at $6 was a net increase in the well-being of consumers, then normative analysis would conclude that:
A. the policy was effective, since surplus lost by producers through lower prices is less than the surplus gained by consumers through lower prices. B. there is no "right" conclusion to be reached (in a normative sense), since people have different opinions concerning what constitutes a better outcome. C. the policy was ineffective, since surplus gained by consumers through lower prices is less than the surplus they lost through deadweight loss. D. the policy was effective, since surplus gained by consumers through lower prices is less than the surplus they lost through deadweight loss.
An increase in the foreign interest rate causes the demand for domestic assets to ________ and the domestic currency to ________, everything else held constant
A) increase; appreciate B) increase; depreciate C) decrease; appreciate D) decrease; depreciate