While waiting in line to buy two tacos at 75 cents each and a medium drink for 80 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $2.50. For Jordan, the marginal cost of purchasing the third taco would be
a. zero.
b. 20 cents.
c. 75 cents.
d. 80 cents.
b. 20 cents.
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The use of foreign exchange reserves to keep exchange rates constant over time is called
A) a fixed exchange rate system. B) the Bretton Woods system. C) a fiscal fix. D) a floating exchange rate system.
Which antitrust act prohibits price fixing and other conspiracies and combinations that restrain trade and attempts to monopolize?
a. Sherman Antitrust Act of 1890. b. Clayton Act of 1914. c. Federal Trade Commission Act of 1914. d. Robinson-Patman Act of 1936. e. Cell-Kefauver Act of 1950.
Suppose a hefty rise in the demand for Mexican pesos creates a chronic shortage of this currency in the foreign exchange market. Which of the following steps should be adopted by the Mexican government to eliminate this shortage?
a. The government should impose a ban on Mexican exports. b. The government should devalue the peso. c. The government should print more pesos to increase its supply. d. The government should allow the peso to appreciate. e. The government should allow the peso to depreciate.
In general, an increase in the price of a good:
A. will cause the substitution effect to be bigger than the income effect. B. will cause the income effect to be bigger than the substitution effect. C. will cause both an income and substitution effect. D. usually will have no effect.