The following are hypothetical exchange rates: 2 euros = 1 pound; $1 = 2 pounds. We can conclude that ________.
A. $1 = 0.5 euro
B. 1 euro = $2
C. 1 euro = $0.50
D. $1 = 4 euros
Answer: D
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The trends displayed in the table can best be explained by
A) service industries have increased as a proportion of the economy and they tend to have higher nominal wage rates. B) the inflation rate has been rising over the time period. C) the real wage rate has increased at a rate about equal to the inflation rate. D) the nominal wage rate has increased at a rate about equal to the inflation rate. E) None of the above can explain the trends in the figure.
Production possibilities curve analysis includes the idea of:
a. opportunity cost. b. scarcity. c. maximum production choices. d. all of these.
When constructing economic models, economists are more concerned with
A. what people think than what they need. B. what people say than how they act. C. what people say than what they do. D. what people do than what they say.
Internal economies of scale means that
A) firms are experiencing lower average production costs due to a geographical concentration of firms in their industry that make it cheaper and easier to hire highly specialized workers and inputs. B) firms will have lower profits after international trade begins, because costs will be higher than when they just focused on the domestic market. C) consumers will have less choices once trade begins, because firms will be squeezed out of the market. D) expanding the size of the market the firm serves reduces overall per unit costs, since the firm can spread costs over more output.