Two nations, ECON and OMICS, each produce goods A and B. The table gives points on each nation's production possibilities curve.ECONOMICSABAB08024162182441232664080For OMICS, the opportunity cost of producing an additional unit of B is
A. 2/3 unit of A.
B. 1/2 unit of A.
C. 1 unit of A.
D. 1/3 unit of A.
Answer: D
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When the yuan per dollar real exchange rate appreciates:
A) the U.S. net exports to China increase while the Chinese net exports to U.S. decrease. B) both the U.S. net exports to China and the Chinese net exports to the U.S. decrease. C) the U.S. net exports to China decrease while the Chinese net exports to U.S. increase. D) both the U.S. net exports to China and the Chinese net exports to the U.S. increase.
Ronald Coase was awarded the 1991 Nobel Prize in Economics primarily for addressing problems related to externalities. Which of the following describes Coase's work?
A) Coase argued that government intervention is necessary to achieve economic efficiency in markets that are affected by externalities. B) Coase proved that a competitive market achieved a greater degree of economic efficiency than a non-competitive market when externalities occur. C) Coase proved that economic efficiency cannot be achieved in a market that is affected by positive or negative externalities. D) Coase argued that under some circumstances private solutions to the problems of externalities will occur.
Figure 5.1 provides support for the Fisher effect, by ________
A) displaying a positive relationship between the inflation rate and the nominal interest rate B) showing how developed economies like the U.S. and Japan have less inflation than economies like Turkey and Indonesia C) focusing on short-run fluctuations, rather than long run averages D) plotting observed, rather than expected inflation E) showing that output is unaffected by changes in the money supply
A trust is:
A. an agreement among firms to charge the perfectly competitive price. B. a compact between industry and government. C. a creation of the Sherman Act. D. an arrangement between firms whereby decision making is controlled by a board of trustees.