Suppose that a haircut in your hometown costs $20, while the price for the same haircut in Mumbai is 600 Indian rupees. At which nominal exchange rate is the dollar price lower for the Mumbai haircut?
A) 0.029$/Rs.
B) 20Rs./$
C) 25Rs./$
D) 0.04$/Rs.
A
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The growth accounting equation suggests that the growth rate of output is equal to the growth rate of ________
A) total factor productivity plus the contributions of both capital and labor B) total factor productivity minus the rate of depreciation C) capital and labor D) the overall population
Which of the following is not related to adverse selection in insurance markets?
a. An insurance company has no way of distinguishing among applicants b. An insurance company must charge a higher price to applicants who are good health risks c. The price of insurance is attractive to poor health risks, but not to good ones d. The insured group becomes less healthy on average e. Because of the relative unhealthiness of the insured group, rates must rise
A tax on primary resource use would
a. Increase recycling rates and raise the costs of some products b. Increase recycling rates and not affect product costs c. Decrease recycling rates and raise the cost of some products d. Decrease recycling rates and not affect product costs e. Decrease recycling rates but the effect on prices is unknown
Joe is the owner of the 7-11 Mini Mart, Sam is the owner of the SuperAmerica Mini Mart, and together they are the only two gas stations in town. Currently, they both charge $3 per gallon, and each earns a profit of $1,000. If Joe cuts his price to $2.90 and Sam continues to charge $3, then Joe's profit will be $1,350, and Sam's profit will be $500. Similarly, if Sam cuts his price to $2.90 and Joe continues to charge $3, then Sam's profit will be $1,350, and Joe's profit will be $500. If Sam and Joe both cut their price to $2.90, then they will each earn a profit of $900.The clear outcome of this game is that:
A. neither Joe nor Sam will cut his price. B. Sam will cut his price and Joe won't. C. both Joe and Sam will cut their price. D. Joe will cut his price and Sam won't.