One impact of a rise in the U.S. dollar's value is that
A. U.S. goods will become cheaper overseas.
B. exports will increase sharply.
C. U.S. goods are cheaper domestically.
D. imports become cheaper for the U.S. consumer.
Answer: D
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Diminishing marginal utility of wealth leads to risk aversion because at a given level of wealth a dollar gained
A) is worth more in additional utility than a dollar lost. B) is worth less in additional utility than a dollar lost. C) is worth as much in additional utility as a dollar lost. D) does not add to total utility.
Quantify the cost savings associated with a cost-effective abatement allocation achieved through trading.
Suppose two point sources are discharging phosphorus into Wisconsin’sFox River and face the following abatement costs for this pollutant: Point Source 1: TAC1 = 500 + 0.35(A1)2 MAC1 = 0.7A1 Point Source 2: TAC2 = 750 + 1.05(A2)2 MAC2 = 2.1A2, where A1 and A2 represent the abatement of phosphorus effluents in pounds by Source 1 and Source 2, respectively, and TAC and MAC are measured in hundreds of dollars. Assume that the state environmental authority has set the total maximum daily load (TMDL) for the Fox River. To achieve this limit, 40 pounds of phosphorus must be abated across the two point sources. Use this information to answer the following questions.
Economist B thinks that it is important to identify the condition(s) under which the case for government is strongest. With respect to the provision of nonexcludable public goods, she says
A) people must pay taxes to pay for the nonexcludable public good. B) firms must pay taxes to pay for the nonexcludable public good. C) people must actually want the nonexcludable public good that the government provides. D) people must express their desire for the nonexcludable public good by voting for it. E) none of the above
Compare the Keynesian and monetarist views about how monetary tools should be used.
What will be an ideal response?