Figure 34-7
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In Figure 34-7, it is probably true that wages are
A. equal in Pestoland and Pastaland.
B. greater in Pestoland than Pastaland.
C. greater in Pastaland than in Pestoland.
D. higher in pasta production than in pesto production in both countries.
Answer: B
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If a four-firm concentration ratio in an industry equals 75 percent, this implies that
a. 75 percent of all profits in the industry accrue to the leading four firms b. 25 percent of sales in the industry are accounted for by the four leading firms c. the four firms represent 75 percent of all the firms in the industry d. the four firms represent 25 percent of all the firms in the industry e. 75 percent of all sales in the industry are accounted for by the four leading firms
Money's principal function is to serve as a
a. standard for making loans. b. standard for credit reporting. c. medium of exchange. d. method for storing wealth.
Using the annuity rule, we can infer that an increase in the market interest rate from 5 to 10 percent will:
A. not change the present value of an annuity. B. halve the present value of an annuity. C. double the present value of an annuity. D. have an unknown effect on the present value of an annuity.
Suppose an MP3 player sells for $75 in the United States and 50 pounds in Britain. Which exchange rate is consistent with purchasing power parity?
a) 1.50 pounds for $1. b) 1 pound for $1.50. c) 3 pounds for $1. d) 1 pound for $1.