Thailand’s experience with pegging the baht to the dollar failed because the baht was
________ relative to the dollar, and China’s experience with pegging the yuan to the
dollar has run into difficulties because the yuan has been ________ relative to the
dollar.
A) overvalued; overvalued
B) undervalued; overvalued
C) undervalued; undervalued
D) overvalued; undervalued
Figure 14-4 Rainbow Writer
(RW) is a small online company selling a highly rated software package for printing
color labels directly onto CDs. The firm currently earns a profit of $2 million per year
selling its package exclusively on its Web site. Odeon, the producer of the most popular
software package for editing and burning CDs and DVDs, has expressed interest in
bundling Rainbow Writer’s product into its own package. Odeon expects that bundling
would further boost its sales and allow it to sell the new bundled product at a higher
price, thus raising its profits beyond its current profit of $12 million. Figure 14-4 shows
the decision tree for the Rainbow Writer-Odeon bargaining game.
What is the equilibrium outcome in this game and is this a subgame-perfect
equilibrium?
A) In the equilibrium, neither offer is accepted as Rainbow Writer holds out for a better
deal. The two rejection outcomes are subgame-perfect equilibria.
B) In the equilibrium, Odeon offers $40 per copy of the software package and is
accepted, but this is not a subgame-perfect equilibrium.
C) Either offer of $30 or $40 per copy of the software package is accepted, and these
two equilibria are subgame-perfect equilibria.
D) Either offer of $30 or $40 per copy of the software package is accepted, but these are
not are subgame-perfect equilibria.
The ________ curve has a positive slope because as prices of final goods and services
rise, prices of inputs rise more slowly.
A) short-run aggregate supply
B) long-run aggregate supply
C) short-run aggregate demand
D) long-run aggregate demand
Table 9-3
Assume the market basket for the consumer price index has three products € Cokes,
hamburgers, and CDs € with the following values in 2006 and 2013 for price and
quantity: The Consumer Price Index for 2013 equals
A) 75.
B) 93.
C) 108.
D) 121.
A linear downward sloping demand curve has price elasticities (in absolute values) that
A) increase as price decreases.
B) remain constant along the demand curve.
C) decrease as price decreases.
D) are greater than or equal to 1.
Figure 11-11 Figure 11-11
illustrates the long-run average cost curve for a firm that produces picture frames. The
graph also includes short-run average cost curves for three firm sizes: ATCa, ATC and
ATCc.
If the firm chooses to produce and sell 25,000 frames per month by operating in the
short run with a scale operation represented by ATCc,
A) the firm will not be operating efficiently.
B) the firm will be operating efficiently.
C) the firm would lower its average costs by reducing its scale of operation.
D) the firm will not be able to earn a profit.
According to the “Rule of 70,” it will take 4 years for real GDP per capita to double
when the growth rate of real GDP per capita is
A) 4 percent.
B) 12.25 percent.
C) 17.5 percent.
D) 28 percent.
Between 1960 and 2010, deaths among children have
A) declined in most high-income countries and have risen in most low-income
countries.
B) declined in nearly all countries, including most low-income countries.
C) remained relatively unchanged in most high-income countries and have declined in
most low-income countries.
D) declined in most high-income countries and have remained relatively unchanged in
most low-income countries.
Allison’s Auto Art is a company that applies pinstripes to vehicles. Allison’s cost for a
basic 1-color pinstriping job is $35, and she charges $95 for this service. For a total
price of $175, Allison will apply a fancier 3-color pinstripe application to an
automobile, a service that adds an additional $40 to the total cost of the package. What
is the marginal cost of moving up from the 1-color application to the 3-color
application?
A) $35
B) $40
C) $80
D) $175
Health insurance plans which typically reimburse doctors mainly by paying ________
are known as health maintenance organizations.
A) a fee for each individual service provided
B) a fee for each individual office visit
C) an escalating fee based on the number of patients being treated
D) a flat fee per patient
Credit card balances are
A) part of M1.
B) part of M2.
C) part of M3.
D) not part of the money supply.