Suppose that the exchange rate between Mexican pesos and dollars is 8 pesos per dollar. If the exchange rate goes to 6 pesos per dollar, it would tend to:
a. decrease U.S. exports to Mexico
b. increase U.S. exports to Mexico.
c. increase Mexican exports to the United States.
d. both (a) and (c)
b
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Refer to Figure 5-2. The size of marginal external costs can be determined by
A) S2 + S1 at each output level. B) the supply curve S1. C) the supply curve S2. D) S2 - S1 at each output level.
Which of the following statements concerning pollution is correct?
A) Economic efficiency requires that pollution be completely eliminated. B) Economic efficiency dictates that the optimal amount of pollution arises at the point at which price equals private marginal cost. C) Pollution should be reduced to the point at which the marginal benefit from further reduction equals the marginal cost of further reduction. D) Pollution should be reduced to the extent necessary to return production to the production possibilities frontier.