The real exchange rate, q, is defined as
A) the price of the foreign basket in terms of the domestic one.
B) the price of the domestic basket in terms of the foreign one.
C) the price of the foreign basket.
D) the price of the domestic basket.
E) the nominal exchange rate in terms of the domestic basket.
A
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Assume that a firm has $100 million in real assets and $90 in real liabilities. The value of its net worth would be ________
A) a negative $10 million. B) $190 million. C) $4190 billion. D) $10 million.
Its critics claim that when advertising ____ the elasticity of demand, firms are able to ____
a. decreases; lower their advertising budget b. increases; become more competitive c. increases; increase their advertising budget d. decreases; charge a larger mark-up over marginal cost
Answer the following statement(s) true (T) or false (F)
1. A volume-based effluent fee is based on the degree of harm linked to the contaminant released. 2. Polluting sources have an incentive to abate up to the point where their Marginal Abatement Cost (MAC) equals the Marginal Effluent Fee (MEF), and to pay the fee beyond that point. 3. When polluting sources with different Marginal Abatement Costs (MACs) are faced with a Marginal Effluent Fee (MEF), eachabates at a different level, which means that the effluent fee does not achieve a cost-effective solution. 4. A fertilizer tax is an example of an effluent fee. 5. Tradeable effluent permit markets can lead to cost savings as long as polluting sources face different marginal abatement costs to control the same pollutant.
Selling a good at a price determined by the intersection of the demand curve and the marginal cost curve is consistent with the (i) socially-optimal level of output. (ii) market solution for profit-maximizing competitive firms. (iii) market solution for a profit-maximizing monopoly
a. (i) and (ii) only b. (ii) and (iii) only c. (i) and (iii) only d. (i), (ii), and (iii)