micro 3
if dans marginal utility from eating one apple is 100 utils and jorge;s marginal utility from eating one apple is 200 utils, it follows that Jorge likes apples more than dan, assuming that dan and Jorge measure the marginal utility of apples in exactly the same way
false
income elasticity of demand measures the responsiveness of quanity supplied to changes in price
false
it is impossible for a given good to be both elastic in demand and inelastic in supply
false
income elasticity of demand for a normal good is always
greater than zero
which of the following is true?
if a consumers is in equilibrium, it necessarily follows that he or she is also achieving the greatest total utility
the purchasing power parity theory predicts better in the ____run and when there ______ in inflation rates across countries
long; are large differences
we take one dollar from a millionaire and give it to a pauper. assuming a diminishing marginal utility of money
we cannot say whether or not total utility changes
suppose the current exchange rate between the US dollar and the Mexican peso is $0.10=1 peso. Furthermore, suppose the price level in the United States rises 15 percent at a time when the Mexican price level is stable. According to the purchasing power parity theory, what will be the new equilibrium exchange rate
$0.115=1 peso
refer to exhibit 20-6. let S1 be the supply curve of a firm. If S2 represents the supply curve of the same firm after the government imposes a per-unit tax, the tax is
$1 per unit
refer to exhibit 20-8. the market for good X is initially at point A. A tax is then placed on the production of good X. It follows that the tax is equal to
$2 per unit
refer to exhibit 19-7. which of the graphs shows a perfectly inelastic demand curve
(1)
refer to exhibit 20-5. which of the graphs represents a greater percentage change in quantity demanded than the precentage change in price?
(1)
refer to exhibit 20-7. if the government wants to impose a per-unit tax in order to raise revenues, which of the depicted markets should it choose in order to maximize tax revenues
(1)
if jack bought 12 DvDs last year when his income was $40,000 and he buys 14 DVDs this year when is income is $43,000, then his income elasticity of demand is _______which means that DVDs are a(n) _______ good for Jack
+0.41; normal
if jack bought 21 DVDs last year when his income was $$30,000 and he buys 23 DVDs this year when his income is $35,000, then his income elasticity of demean is _____which means that DVDs are a(n) ____good for jackknifes
+1.69; normal
refer to exhibit 20-9. what is the price elasticity of supply between $4 and $6
0.5
refer to exhibit 20-9. what is the price elasticity of demand between $2 and $4?
0.75
refer to exhibit 19-2. the market for good X is initially in equilibrium at $5. the government then places a per unit tax on good X, as shown by the shift of S1 to S2. Approximately what percentage of the tax do producers end up paying
45 percent
refer to exhibit 20-2. the market for good X is initially in equilibrium at $5. the government then places a per-unit tax on good X, as shown by the shift of S1 to S2. Approximately what percentage of the tax do producers end up paying
45 percent
Suppose a Mexican consumer wants to buy an American television for $500 and an American wants to buy a Mexican raincoat for 700 pesos. If the exchange rate is $0.10 = 1 peso, then the price of the television in pesos will be __________ and the price of the raincoat in dollars will be __________.
5000 pesos; $70
refer to exhibit 6-9. what value goes in blank (B)
95
refer to exhibit 35-4. Under a fixed exchange rate system, at the exchange rate of E3, the peso is _______ and there is a _________.
undervalued; shortage of pesos
refer to exhibit 35-4. under a fixed exchange rate system, at the exchange rate of E3, the peso is _______and there is a _______-
undervalued; shortage of pesos
which of the following statements is false?
we do not know if any of the statements are true or false, because we do not know how much utility one person receives relative to another
if labor is immobile between two countries, changes in relative demand for goods and services may pose major economic problems
when exchange rates are fixed, but not when they are flexible
which of the following statements is false?
when the value of a country's imports is great than the value of its exports, the country's net exports will be a positive value
economist Charles Kindleberger (a proponent of fixed exchange rates mentioned in the text) would agree with which of the following statements?
with no certainty of what one nation's currency will be worth in terms of other nations' currencies, international trade is held below what it could be.
in order for an individual to achieve consumer equilibrium through the consumption of two goods, A and B, that individual must fulfill the condition
MUa/Pa=MUb/pb
a decline in consumer's real income occurs as a consequence of
all of the above
some economist have found that U.S imports of Chinese goods and resources
all of the above
if the MU/P ration for good X is less than the MU/P ratio for good Y, this means that
an individual is recieving more utility per dollar from good y than good X
refer to exhibit 35-5. based on the information provided in this table, between Monday and Tuesday, the U.S dollar ________against the Thai and the baht _________against the US dollar
appreciated; depreciated
in the Texas A&M study if the "buying" behavior of two white rats, as the "relative price" of th one beverage was raised
both white rats began to consume less of the higher-priced beverage
if the marginal utility of a good is negative, then
consumers should buy less of it
if real interest rates in Japan fall relative to real interest rates in the United States, the yen will likely _____in terms of the dollar and the dollar will likely ______ in terms of the yen.
depreciate; appreciate
if, as a result of market forces, the exchange rate changes from $1 equals 11 pesos to $1 equals 9 pesos, then the dollar has
depreciated
suppose that the exchange rate between the US dollar and the Mexican peso is 1 peso =$0.11. if the US dollar price per Mexican peso changes to 1 peso=$0.10, the peso is said to have ________ and the dollar to have ________
depreciated; appreciated
If, under a fixed exchange rate system, the dollar price of Mexican pesos is below its equilibrium level, then the
dollar is overvalued
Good Z is income unit elastic. this means that the percentage change in income is
equal to the percentage change in the quantity demanded of good Z.
If the seller of good X raises the price of good X, it follows that the total revenue of good X will __________, if demand is __________.
fall, elastic
If $1=96 Japanese yen on Wednesday and on Thursday $1=100 Japanese yen, then the dollar depreciated against the yen between Wednesday and Thursday
false
all economists agree that the European Union is an example of a true optimal currency area
false
economist use the term utility to mean usefulness
false
if a good is a normal good, it can not also be income inelastic
false
if a good is perfectly inelastic in a given price range, it will be perfectly inelastic at all prices
false
When the equilibrium dollar price of a foreign currency decreases due to changes in demand for or supply of the foreign currency, the foreign currency
has depreciated
the longer the period of time consumers have to adjust to price changes, the _____the ______elasticity of demand
higher; price
real income is
income adjusted for price changes
if the equilibrium exchange rate between U.S dollars and Japaneses yen is $0.01=1 yen but currently the exchange rate is $0.009=1 yen, then with flexible exchange rates the dollar price of a yen will ____ and the yen will_____
increase; appreciate
when quantity demanded of a good increases, total revenue
increases, if demand is elastic
A broadway play company can only charge one price for tickers to a given performance of its play. the company manager notices that the company earns greater total revenue when they charge a higher ticket price and its theater is three- quarters full than when they charge a lower ticket price and the theater is completely full. It follows that demand for this play is
inelastic
if the percentage change in quantity demanded is less than the percentage change in price for goody, then the demand for good y is
inelastic
if income elasticity of demand for a good is negative, the good is a(n)______good.
inferior
if total utility of a good is high while the price of the good is low, It is likely that the good
is plentiful
if the average income per US worker decreases while that of Japaneses workers remains unchanged, then the demand curve for Japanese yen will shift _________ which will cause the equilibrium excahgen rate of the dollar price per yen to ________which is the same thing as saying that the dollar will ______
leftward, fall; appreciate
as the dollar price of a foreign currency (for example, dollars per yen) decreases, foreign goods will be____ expensive,_____foreign goods will be purchased, and ______foreign currency will be demanded.
less; more;more
government wants to maximize its tax revenue and it can only place a $2 per-unit tax on one of two goods. It should place the tax (on the production) of the good whose demand curve has the
lower price elasticity of demand
the current international monetary system is best described as a
managed flexible exchange rate system
if the US dollar appreciates in the foreign exchange market US exports will be______and US imports will be _________
relatively more expansive, relatively less expansice
if the US dollar appreciates in the foreign exchange market, US exports will be______ and the US imports will be _______
relatively more expansive; relatively less expansive
if goods A and B have a cross elasticity of demand that is positive, this is evidence that goods A and B are _____goods
subsitute
If Americans demand goods produced in Mexico, it leads to a demand for Mexican pesos and a supply of U.S. dollars on the foreign exchange market.
true
a good can have high total utility and low marginal utility
true
a good is unit elastic in demand if as the price changes there is no resulting change in total revenue
true
advocates of a fixed exchange rate system argue that fixed exchange rates promote international trade
true
ford mustangs would tend to be more elastic in demand than all cars because there are more substitutes for Ford Mustangs than for cars
true
in the foreign exchange market between dollars and pesos, the demand for dollars by Mexicans creates the supply of pesos
true
it is possible for total utility to rise as marginal utility falls
true
it is very important for the seller of a good to know whether the good is elastic, unit elastic, or inelastic in demand so that she will know what will happen to total revenue when she changes the price of the good.
true
one example of an optimal currency area is the states within the United States.
true
the concept of an optimal currency area arose from the debate over whether fixed or flexible exchange rates are better
true
the more narrowly defined a good is, the more elastic the demand for the good will tend to be, ceteris paribus
true
the two white rats in the "buying" behavior study conducted at Texas A&M acted in a manner that supported the law of demand and the concept of consumer equilbrium
true
under a fixed exchange rate system, if the dollar price of Mexican pesos is above its equilibrium level, the peso is referred to as overvalued and the dollar is necessarily undervalued
true
when a good is perfectly inelastic in demand, or perfectly elastic in supply, the buyers will pay the full tax that is placed on the seller
true
when people treat some dollars differently than others, they are said to be conpartmentalizing
true
when the price of a good rises, total revenue will fall if the good is elastic in demand
true
The US dollar currently serves as the "unit of account" of major global products
ture
refer to exhibit 19-5. for graph (1), what is the price elasticity of demand going between $2.00 and $1.50
2.33
19-9. what is the price elasticity of demand between $4 and $6
1.25
an American computer is priced at $1,200. If the exchange rate between the U.S dollar and the Mexican peso is $0.09=1 peso, approximately how many pesos would a Mexican buyer pay for the computer
13,333 pesos
refer to exhibit 20-5. for graph (1), what is the price elasticity of demand going between $2.00 and $1.50?
2.33
which of the following statements is false?
A,B,C
in which of the following settings is an interpersonal utility comparison being made?
Abc
Suppose that prices in the United States rise relative to prices in france. We expect that (on the foreign exchange market) the demand for US dollars will _______ and the supply of dollars will ________
decrease; increase
suppose the marginal utility (MU) of paperback books is 40 utils and each cost $4 while the MU of video movies is 50 utils and each rents for $4. If you consume one movie and one book per week, are you attaining consumer equilibrium?
no you need to rent more videos and buy fewer books
if supply is inelastic, it follows that
none of the above
those economist who argue that the European Union is not a true optimal currency area cite ___________and ___________as justification for this position
none of the above
19-5 for graph (3), if the seller of X raises the price from $1.50 to $2.00, the total revenue the seller receives will
not change
refer to exhibit 35-4. Under a fixed exchange rates system, at the exchange rate of E3, the dollar is ______and there is a _____.
overvalue; surplus of dollars
a per- unit tax is placed on the production of good Y. Someone who believes that the producers of the good will end up paying the full tax may be assuming that the good's demand curve is
perfectly elastic
consumers will pay the full tax that is placed on the sellers of a good if demand is _______or supply is _____
perfectly inelastic; perfectly elastic
in a foreign exchange market diagram with dollars per peso on the vertical axis, the quantity of _______ would be on the horizontal axis, and the US demand for Mexican goods would help to determine the _____curve
pesos; demand
if the equilibrium exchange rate between US dollars and Japanese yen is $0.01=1 yen but currently the exchange rate is $0.0089=1 yen, then a __________ exists
surplus of dollars shortage of yen B and D
suppose the mean d for a particular good is perfectly inelastic and the government decides to impose a tax on the production of his good. who will pay the greater share of such a tax
the buyers will pay the entire share
There is a flexible exchange rate system and only two countries in the world, the United States and Mexico. If the inflation rate in the United States rises relative to the inflation rate in Mexico, it follows that
the dollar will depreciate and the peso will appreciate
To know whether the dollar is overvalued, we need to know
the equilibrium exchange rate between the dollar and the foreign currency the dollar is being compared with
Jackson says that his fifth game of chess gave him greater utility than his first, and therefore the law of diminishing marginal utility does not hold. An economist who believes that marginal utitlity definitely and always declines with the consumption of equal successive units of a good will likely say
the fifth game of chess is a different good than the first game of chess
There is a flexible exchange rate system and only two countries in the world, the United States and Mexico. If the inflation rate in the United States rises relative to the inflation rate in Mexico, it follows that
the peso will depreciate and the dollar will appreciate
Given two goods, X and Y, their prices, Px and Py, and a constant marginal utility of money, a consumer is in equilbrium when the last dollar spent on X yields
the same marginal utility as the last dollar spent on Y
