The U.S. dollar exchange rate, e, expressed as Japanese yen per U.S. dollar, will depreciate when:
A. the U.S. Federal Reserve tightens monetary policy.
B. real GDP in Japan increases.
C. real GDP in Japan decreases.
D. U.S. consumers decrease their preference for Japanese cars.
Answer: C
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Demand is elastic if
A) consumers respond strongly to changes in the product's price. B) a large percentage change in price brings about a small percentage change in quantity demanded. C) a small percentage change in price brings about a small percentage change in quantity demanded. D) the quantity demanded is not responsive to price changes. E) the demand curve is vertical.
Assume that both the goods and the labor market are perfectly competitive. If at equilibrium, the marginal cost faced by a firm is $3 and the market wage rate is $6, the marginal product of the last unit of labor hired by the firm must be:
A) 0.5 units. B) 2 units. C) 9 units. D) 18 units.
According to the graph shown, if the market is in equilibrium, producer surplus is area:
A. A.
B. A + B + C.
C. A + B + C + D + E.
D. D + E.
Bans and quotas ___________ in situations where it is difficult or costly for authorities to monitor and punish rule-breakers.
A. often succeed B. sometimes succeed C. rarely succeed D. always succeed