According to the theory of purchasing-power parity, the nominal exchange rate between two countries must reflect the differing
a. price levels in those countries.
b. resource endowments in those countries.
c. income levels in those countries.
d. standards of living between those countries.
a
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Sensitivity analysis is restricted to natural sciences.
Answer the following statement true (T) or false (F)
Exhibit 7-16 Long-run average cost curves
In Exhibit 7-16, which firm's long-run average cost curve experiences constant returns to scale between 2 and 5 units?
A. Firm A. B. Firm B. C. Firm C. D. Firms A and C.
A firm's demand for labor depends on, in part, the demand for the firm's product. To summarize this idea, economists say that the demand for labor is:
A. derived demand. B. marginal demand. C. secondary demand. D. monopsonistic demand.
The St. Petersburg paradox occurs when:
A. individuals are willing to pay significantly more than the expected value of a gamble. B. individuals are willing to pay significantly less than the expected value of a gamble. C. individuals are willing to pay exactly the expected value of a gamble. D. None of the statements illustrates the St. Petersburg paradox.