If inflation in the United States is higher than in Japan, what will happen to the exchange rate between the U.S. dollar and the Japanese yen?
What will be an ideal response?
The dollar will depreciate and the yen will appreciate.
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A local cable company has its rates set at P = $15 by a regulatory commission. Its current output is 10,000 households and its costs are as follows: ATC = $17; AVC = $14; and MC = $15 . From this, we can tell that this is:
a. a fair price, and the firm earns a normal profit. b. a fair price, and the firm earns an economic loss. c. marginal cost pricing, and the firm earns a normal profit. d. marginal cost pricing, and the firm earns an economic loss. e. the same price that an unregulated monopolist would charge.
"Value pricing" stresses the importance of product differentiation
Indicate whether the statement is true or false
A bank has total assets of $3,000,000. Of these assets, $200,000 are cash and $300,000 are Treasury securities
Furthermore, the bank holds municipal revenue bonds of $600,000, residential mortgages of $1,000,000, and consumer and commercial loans of $900,000. This bank's risk-adjusted assets are A) $3,000,000. B) $1,900,000. C) $1,250,000. D) $1,070,000.
Appendix: Winning an auction can be exhilarating, but it can also lead to doubt as to whether you did the right thing or not. This is called:
a. The regret effect. b. Moral hazard. c. Second wind. d. The winner's curse.