If currency speculators believe South Korea will have much lower inflation in the future than the United States, then this event is most likely to cause the South Korean won to:
A. Depreciate and the U.S. dollar to depreciate
B. Depreciate and the U.S. dollar to appreciate
C. Appreciate and the U.S. dollar to appreciate
D. Appreciate and the U.S. dollar to depreciate
D. Appreciate and the U.S. dollar to depreciate
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The "marginal rate of substitution" between two goods is measured by:
A) the ratio of the market prices of the two goods. B) the number of units of a good consumed divided by the market price of the other good. C) the number of units of one good a consumer would give up to consume one more unit of another good, while holding total utility constant. D) the consumer's budget constraint divided by the price of each good.
Production is efficient when
A) it generates a point beyond the production possibility curve. B) the maximum output possible is being produced given current levels of resources and technology. C) technological change occurs. D) the maximum amounts of the most important good are produced.