The main input into the production of Starbuck’s coffee is imported coffee beans. If the dollar depreciates, how will this affect the U.S. retail coffee market?
A. Input prices will fall and supply will decrease.
B. Input prices will fall and supply will increase.
C. Input prices will rise and supply will decrease.
D. Input prices will rise and supply will increase.
Answer: C
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AIG almost went bankrupt in 2008 because
A) the value of the securities underlying its credit default swaps declined significantly. B) it lacked the collateral required by buyers of its credit default swaps. C) prices of securities underlying their credit default swaps were hard to determine since they were no longer actively traded. D) all of the above.
What term applies to the net loss of total surplus that results from an action that alters a market equilibrium?
a. welfare gain b. net profit c. deadweight loss d. price ceiling
Figure 10.2 depicts a firm's marginal revenue product curve. Suppose that we observe the firm demanding five workers. If the firm is maximizing its profit, the wage rate must be between ________ and ________.
A. $5; $10 B. $10; $15 C. $15; $20 D. $25; $30
You own a business that distributes restaurant menus to houses and apartments. You have an incentive to substitute labor for capital if the
A. price of labor increases. B. price of labor decreases. C. marginal product of labor decreases. D. price of capital decreases.