Complete the following sentence. Because money functions as a ________ it eliminates the need for bartering.
A. medium of exchange
B. double coincidence of wants
C. store of value
Ans: A. medium of exchange
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The income elasticity of demand for foreign travel
A) is likely to be smaller than the income elasticity of demand for food. B) is likely to be larger than the income elasticity of demand for food. C) cannot be compared to the income elasticity of demand for food. D) is likely to be inelastic. E) is likely to be negative.
If a country's currency is "pegged" to the dollar, its exchange rate is
A) floating. B) flexible. C) undervalued. D) fixed.
"Missing markets" result from
a. high transactions costs of such markets. b. strict price controls. c. the inability of producers to gain economies of scale. d. foreign countries dominating a domestic market for a product.
If a perfect competitor is currently charging $9 for its product and the marginal cost of the last unit produced is $6, the firm should
a. cut back production and increase price b. stay at its current price and output level c. increase price and output d. increase price and hold output constant e. increase output