Explain what the free market will do if exchange rates end up in the "right ranges."
What will be an ideal response?
If exchange rates end up in the right ranges, the free market will drive each country to shift resources into those sectors in which it enjoys a comparative advantage. Only those products in which a country has a comparative advantage will be competitive in world markets.
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If a government imposed price ceiling legally sets the price of beef below market equilibrium, which of the following will most likely happen?
a. The quantity of beef demanded will decrease. b. The quantity of beef supplied will increase. c. There will be a surplus of beef. d. There will be a shortage of beef.
Identify the correct statement from the following
a. Modern telecommunications turned cities like Omaha and Bangalore into new resources for the world. b. Being only 10 hours away from most of the industrial world enabled Anchorage, Alaska to become the busiest cargo airport in the world. c. Call centers in the U.S. set up shop in small towns to prevent large-scale migration to bigger cities. d. Unless a city is in an advantageous location for conducting any form of business, it is difficult to boost its economy in today's world.
Explain the three different types of money demand.
What will be an ideal response?
Assume that a purely competitive firm uses two resources—labor (L) and capital (C)—to produce a product. In which situation would the firm be maximizing profit?
A. Choice A
B. Choice B
C. Choice C
D. Choice D