Protecting intellectual property rights:
A. can reduce total surplus for society.
B. never increases total surplus for society.
C. never affects total surplus for society.
D. always increases total surplus for society.
A. can reduce total surplus for society.
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An increase in the price level causes an increase in money demand because
a. people need more money to purchase the same level of goods and services. b. changes in the price level have no effect on money demand. c. people have unlimited wants. d. people need less money to purchase the same level of goods and services.
The actual exchange rate of the real, Brazil's currency, is 2.50 real per U.S. dollar. According to the latest PPP estimations, the real is undervalued by 40 percent. This implies that the PPP exchange rate is:
A. 1.40 real per dollar. B. 1.20 real per dollar. C. 1.50 real per dollar. D. 2.00 real per dollar.
Suppose that there are two types of cars, good and bad. The qualities of cars are not observable but are known to the sellers. Risk-neutral buyers and sellers have their own valuation of these two types of cars as follows:Types of CarsBuyer's ValuationSeller's ValuationGood (50% probability)5,0004,500Bad (50% probability)3,0002,500Suppose that both buyers and sellers observe the quality. What happens?
A. Only good cars are traded. B. Only bad cars are traded. C. Neither good nor bad cars are traded. D. Both good and bad cars are traded.
Growth in well-being tends to be understated by growth in real GDP because of increases in leisure time.
a. true b. false