Economics is the study of the allocation of scarce resources and scarce time, and the ways in which people utilize those resources or that time
a. True
b. False
Indicate whether the statement is true or false
True
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If the exchange rate falls from 120 yen per dollar to 110 yen per dollar, the dollar has depreciated
Indicate whether the statement is true or false
A U.S.-based multinational has two subsidiaries, one in Lithuania where the tax rate is 15%, and one in Ireland where the tax rate is 2%. The tax rate in the U.S. is 35%
If the Lithuanian-based subsidiary is transferring a good to the Irish subsidiary and the goal is to avoid taxes, it will A) sell it to the U.S. parent at a transfer price equal to marginal cost, which will then sell it to the Irish subsidiary at monopoly level pricing. B) set the transfer price to the Irish subsidiary at the monopoly level. C) set the transfer price to the Irish subsidiary at marginal cost. D) Unable to determine with the information given.
Hot dog vendors on the beach fail to cooperate with one another on the quantity of hot dogs they should sell to earn monopoly profits. A consequence of their failure is that, relative to the outcome the vendors would like, (i) the quantity of hot dogs supplied is closer to the socially optimal level. (ii) the price of hot dogs is closer to marginal cost. (iii) the hot dog market at the beach is
less competitive. a. (i) and (ii) b. (ii) and (iii) c. (i) and (iii) d. (iii) only
The sticky-price theory of the short-run aggregate supply curve says that when the price level is higher than expected, some firms will have
a. higher than desired prices, which leads to an increase in the aggregate quantity of goods and services supplied. b. higher than desired prices, which leads to a decrease in the aggregate quantity of goods and service supplied. c. lower than desired prices, which leads to an increase in the aggregate quantity of goods and services supplied. d. lower than desired prices, which leads to a decrease in the aggregate quantity of goods and services supplied