A situation in where the costs of an action are NOT fully borne by the two parties engaged in exchange is
A) an externality.
B) an internality.
C) internal costs.
D) a transactions cost.
Answer: A
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The United States had serious difficulties fighting inflation in
A) the 1970s. B) the 1980s. C) both the 1970s and the 1980s. D) every decade since World War II.
How does a country maintain a fixed exchange rate?
A) By intervening in the foreign exchange markets and buying or selling currency as needed to achieve the desired exchange rate. B) By forbidding foreign exchange markets to trade currency at anything other than the official exchange rate. C) By setting domestic interest rates to achieve purchasing power parity as the desired exchange rate. D) By intervening in import and export markets to achieve the desired current account and exchange rate.
If a firm increases output when MR > MC, then:
a. profit will equal zero. b. profit will increase. c. profit will decrease. d. profit will remain the same. e. the firm is minimizing losses.
Refer to the accompanying table below. The marginal benefit of the 5th unit of activity is:Units of ActivityTotal CostTotal Benefit0$0$01$30$1002$40$1603$60$1904$100$2105$150$2206$210$225
A. $44 B. $10 C. $50 D. $5