In the foreign exchange market, if the demand for dollars permanently decreases, the Fed can maintain the exchange rate at its old equilibrium level indefinitely by buying dollars.
Indicate whether the statement is true or false
Ques. 2A household's reservation wage is the ________.
A) lowest wage rate at which the household will supply labor
B) wage at which the household's labor supply curve bends backward
C) wage rate at which the household's income is largest
D) highest wage rate at which the household will supply labor
Ques. 3If two consumption points are not on the same indifference curve, then one point is ________.
A) a substitute for the other point
B) unaffordable and the other is affordable
C) preferred to the other
D) more expensive than the other
Ques. 4A single-price monopolist produces a ________ quantity than a perfectly competitive market with the same costs and charges a ________ price than the perfectly competitive market.
A) greater; higher
B) greater; lower
C) lesser; lower
D) lesser; higher
Ques. 5Nicole is indifferent between option A, which gives her 20,000 for sure, and option B, which gives her 10,000 with probability 0.5 or 32,000 with probability 0.5. Nicole's cost of risk for option B is
A) zero.
B) 1,000.
C) 2,000.
D) 20,000.
Ques. 6Sergio consumes only beef and snails and is maximizing his utility. If the price of beef is less than the price of snails, then we definitely know that
A) Sergio buys more beef than snails.
B) Sergio buys more snails than beef.
C) the marginal utility from the last pound of beef purchased is greater than the marginal utility from the last pound of snails purchased.
D) the marginal utility from the last pound of snails purchased is greater than the marginal utility from the last pound of beef purchased.
Ques. 7There are 6 firms in a market and the market shares of the firms are 40 percent, 30 percent, 10 percent, 8 percent, 7 percent, and 5 percent. The Herfindahl-Hirschman index is
A) 2738.
B) 2664.
C) 100.
D) 88.
Ques. 8Archibald's Tattoos is a perfectly competitive firm. The firm's costs are shown in the table above. If the market price of a tattoo is 17.50, what is the firm's economic profit?
A) zero
B) 2.50 per hour
C) 12.50 per hour
D) -10.00 per hour
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