When Pierre in Paris, France buys stock in Disney, Inc., he is contributing to:
A. domestic investment in the U.S.
B. capital outflow from the U.S.
C. capital inflow to the U.S.
D. private savings in the U.S.
Answer: C
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An individual firm's best response:
A. is the firm's most profitable choice given the actions of its rivals. B. is not necessarily selected by all firms in a Nash equilibrium. C. is always the option with the highest price for each firm. D. is to set the same price and quantity as all of its rivals.
Suppose a consumer's utility function is U(F0, F1) = F00.5F10.5, where F0 represents food consumed this year and F1 represents food consumed next year. For that utility function, the marginal utility of food consumed this year is 0.5 × (F1/F0)0.5 and the marginal utility of food consumed next year is 0.5 × (F0/F1)0.5. Suppose the consumer earns $100 this year and nothing in the next, food costs $1 per unit in both years, and the interest rate is 10%. How much does she spend this year, and how much does she save?
A. She spends $45 this year and saves $55. B. She spends $50 this year and saves $50. C. She spends $55 this year and saves $45. D. She spends $95 this year and saves $5.
Suppose that the adult population is 6 million, the number of employed is 3.8 million, and the labor-force participation rate is 70%. What is the unemployment rate?
a. 6.7% b. 9.5% c. 10.5% d. 28%
Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Which of the following is true? The opportunity cost of:
A. 1 iPod in Country B is 2 tablets. B. tablets is lower in Country A than Country B. C. 1 iPod in Country A is 2 tablets. D. 1 tablet in Country A is 2 iPods.