The competitive market price of a good
A. is equal to the value consumers place on the last unit they purchased.
B. must reflect both the value to consumers and cost to producers.
C. must exceed the cost of producing an extra unit of the good.
D. must be less than what consumers are willing to pay for an additional unit of the good.
B. must reflect both the value to consumers and cost to producers.
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If the current account balance is negative, net interest is $100 billion and net transfer is -$100 billion, then
A) exports exceed imports. B) imports exceed exports. C) the official settlements account must be positive. D) real GDP exceeds potential GDP. E) the official settlements account must be negative.
Comparing fixed to flexible exchange rate, the response of an economy to a temporary fall in foreign demand for its exports is
A) output actually falls less under fixed rate than under floating rate. B) output actually falls more under fixed rate than under floating rate. C) output actually remains the same under fixed rate than under floating rate. D) the currency value grows in a fixed rate system and falls in a flexible system. E) output grows in a fixed rate system and falls in a flexible system.
If a consumer weakly prefers pizza to hot dogs, and weakly prefers hot dogs to chicken, then he ________ pizza ________ chicken
A) likes; less than B) likes; at least as much as C) dislikes; more than D) dislikes; and is indifferent about
One of the reasons that price elasticities of demand are always stated as positive numbers is because:
a. the numerators and denominators of the formula are both negative. b. the numerators and denominators of the formula are both positive. c. price increases always lead to increases in quantity demanded. d. price decreases always lead to decreases in quantity demanded. e. price elasticities are always negative, so we ignore the sign.