According to purchasing power parity, the nominal exchange rate between the U.S. and another country should equal the price level of foreign goods divided by the price level of U.S. goods
a. True
b. False
Indicate whether the statement is true or false
True
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The fundamental force that drives international trade is
A) absolute advantage. B) importation duties and tariffs. C) export licenses. D) comparative advantage.
At the long-run equilibrium level of output, the monopolist's marginal cost will:
a. exceed price. b. equal price. c. be less than price. d. be less than marginal revenue.
Define the following terms and explain their importance to the study of economics
a. public good b. externality c. irreversible decision d. moral hazard e. rent seeking
In which of the following cases did someone use adverse selection?
a. Mr. Wong truthfully told Barbara he did not know how many horsepower his truck had when he sold it to her. b. Neither Mrs. Lin nor Mr. Hill knew anything about the antique desk in Mrs. Lin’s attic, but they both made up lies about it when Mr. Hill bought it. c. Miles knew that the boat motor he sold Mr. Sutton had a bad water pump and that Mr. Sutton did not know it, but Miles still did not mention it. d. Ms. Romano and Mr. Charles are both coin experts who knew exactly the worth of the silver dollar that Ms. Romano sold to Mr. Charles.