An American computer is priced at $1,200. If the exchange rate between the U.S. dollar and the Mexican peso is $0.09 = 1 peso, approximately how many pesos would a Mexican buyer pay for the computer?
A) 13,333 pesos
B) 108 pesos
C) 133.50 pesos
D) 15,075 pesos
A
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In general, individuals and nations should specialize in producing those goods for which they have a(n):
A. absolute advantage. B. absolutely comparative advantage. C. absolute advantage and a comparative advantage. D. comparative advantage.
If banks engage in fractional reserve banking, it means that
A) they hold less than 100 percent of their deposits as reserves. B) they do not hold any excess reserves. C) a fraction of their legal reserves are held as top-grade government securities. D) they never run short of currency.
In the market for books, initially there are no taxes on books. Books are normal goods. The government introduces a tax of $4 a book and, at the same time, people's income fall by $4,000 a year
Following these two changes, the equilibrium quantity of books A) decreases. B) increases. C) remains unchanged. D) either increases or decreases. We cannot say which.
Suppose the market demand function in a certain market where Q is measured in thousands of units is Qd = 20 - 2.5P, and the market supply function is Qs = 2.5P - 7.5. How much deadweight loss would there be in this market if the quantity bought and sold was 5,000 units?
A. $0.63 B. $62.50 C. $625 D. $6,250