Today, the dollar is worth 1.15 euros. Due to changes in economic conditions, people expect that the dollar will be worth 1.20 euros in the next month. This belief
A) increases the demand for dollars.
B) decreases the demand for dollars.
C) increases the demand for euros.
D) increases the value of exports to Europe.
A
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If activists successfully lobbied government to force firms to produce more output than they normally would in a perfectly competitive market,
A) consumer surplus would decline. B) producer surplus would increase. C) taxation would solve the problem. D) total surplus in the market would decline.
An inward shift in the entire production possibilities frontier
A. represents economic growth. B. means that the economy can produce more of both goods. C. takes place if there is an expansion in the labor force. D. means that previous levels of production are now unobtainable.
Figure 11-3
Using the graph in Figure 11-3, the profit-maximizing monopolist will charge a price
a.
of more than $3.
b.
of $3.
c.
between $2 and $3.
d.
of $2.
Utility theory assumes that a consumer tries to
A) maximize her average utility. B) maximize her marginal utility. C) maximize the difference between total and marginal utility. D) maximize her total utility.