A copper mining firm has discovered that there is gold mixed in with its copper ore. Since the marginal cost of mining the gold is negligible, they are willing to sell it at the current market price of $500 an ounce. If the rate of interest is 5%, the firm should expect the price next year
a. to rise to $505.
b. to rise to $525.
c. to rise to over $525.
d. to remain constant.
b. to rise to $525.
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The demand for dollars in the foreign exchange market will increase (so that the demand curve shifts rightward) if
A) the U.S. interest rate differential falls. B) the expected future exchange rate falls. C) the exchange rate for the dollar falls. D) None of the above answers is correct.
Public goods create a free-rider problem because the quantity of the good that a person consumes ________ for that good
A) does not depend on the amount that the person pays B) increases as that person pays less C) increases as that person pays more D) decreases as that person pays more
The form of government debt that was created to allow more people to buy and hold government debt is the
a. Treasury bond b. Treasury bill c. Treasury note d. savings bond e. savings bill
The debate over whether advertising serves a valuable purpose in society is definitively answered by economists who study the tastes and preferences of individuals
a. True b. False Indicate whether the statement is true or false