In the above figure, the optimal level of pollution cleanup is
A. Q1.
B. Q2.
C. Q3.
D. Q4.
Answer: C
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The introduction of a new technology that increases the productivity of labor will:
A. increase the supply of labor. B. increase the demand for labor. C. decrease the demand for labor D. decrease the supply of labor.
The "Big Mac Theory of Exchange Rates" tests the accuracy of the purchasing power parity theory. In July 2015, the Economist reported that the average price of a Big Mac in the United States was $4.79
In Mexico, the average price of a Big Mac at that time was 49 pesos. If the exchange rate between the dollar and the peso was 13.60 pesos per dollar, explain how it would be profitable to buy Big Macs in Mexico instead of in the United States.
Prices in both the U.S. and China rise, but prices in China increase by a larger percentage. According to purchasing-power parity, the U.S. dollar
a. gains value both in terms of the domestic goods and services it can buy and in terms of the Chinese currency it can buy. b. gains value in terms of the domestic goods and services it can buy, but loses value in terms of the Chinese currency it can buy. c. loses value in terms of the domestic goods and services it can buy, but gains value in terms of the Chinese currency it can buy. d. loses value both in terms of the domestic goods and services it can buy and in terms of the Chinese currency it can buy.
Suppose that the CPI doubles from 1995 to 2004. That means that prices have risen by
A. 50%. B. 100%. C. 150%. D. 200%.