According to William Niskanen's model of bureaucracy, Congress tends to approve a bureau's budget at a level where
a. the marginal value of the last unit of the bureau's output is greater than the marginal cost.
b. the marginal cost of the last unit of the bureau's output is greater than the marginal value.
c. the marginal value of the last unit of the bureau's output equals the marginal cost.
d. the marginal cost of the last unit of the bureau's output is zero.
b. the marginal cost of the last unit of the bureau's output is greater than the marginal value.
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If the inflation rate in the United States is higher than that in Mexico and productivity is growing at a slower rate in the United States than in Mexico, then, in the long run, ________, everything else held constant
A) the Mexican peso will appreciate relative to the U.S. dollar B) the Mexican peso will depreciate relative to the U.S. dollar C) the Mexican peso will either appreciate, depreciate, or remain constant relative to the U.S. dollar D) there will be no effect on the Mexican peso relative to the U.S. dollar
A sudden expectation of future appreciation of the dollar causes funds to flow __________ the United States and the dollar to actually __________
A) out of; depreciate B) out of; appreciate C) into; depreciate D) into; appreciate
Suppose a risk-neutral power plant needs 10,000 tons of coal for its operations next month. It is uncertain about the future price of coal. Today it sells for $60 a ton but next month it could be $50 or $70 (with equal probability). How much would the power plant be willing to pay today for an option to buy a ton of coal next month at today's price? (Ignore discounting over the short period of a
month.) a. 5 b. 4 c. 3 d. 0
When a monopolist decreases the price of its good, consumers
a. continue to buy the same amount. b. buy more. c. buy less. d. may buy more or less, depending on the price elasticity of demand.