The largest component of household consumption spending is expenditures on
a. services
b. durable goods
c. nondurable goods
d. food
e. transportation
A
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If a bottle of fine French wine costs US$250 in the U.S., 2500 rand in South Africa, there are no transaction costs, and the exchange rate is 5 rand/US$, then
A) there is an arbitrage opportunity by buying the wine in the U.S., and selling it in South Africa and the price in South Africa will drop. B) there is an arbitrage opportunity by buying the wine in South Africa., and selling it in the U.S. and the price in the U.S. will drop. C) here is an arbitrage opportunity by buying the wine in South Africa., and selling it in the U.S. and the price in the U.S. will rise. D) there is no arbitrage opportunity.
Answer the following statements true (T) or false (F)
1) A multi-plant firm is a firm with more than one demand curve. 2) Regardless if a multi-plant firm is perfectly competitive or has market power, to maximize profits, managers need to set the overall marginal cost from producing in each of their plants equal to the marginal revenue to find the profit-maximizing total quantity. 3) If the market price for multi-plant, perfectly competitive firm is $4, to maximize its profits, the firm should set the overall marginal cost of production equal to $4. 4) If the market price for multi-plant, perfectly competitive firm is $5, to maximize its profits, the firm should set the overall marginal cost of production to exceed $5. 5) If a multi-plant firm has market power, to maximize profit, it should set a price that exceeds its overall marginal cost.
Deflation refers to a:
a. decreasing relative prices. b. decreasing price level. c. slowing down of the rate of inflation. d. federal government policy of running budget surpluses.
What are the two important programs in practice in America that strongly resemble a negative income tax?
What will be an ideal response?