Suppose the U.S. government is about to ban the importation of Nicaraguan steel. The reason cited is that the production of steel contributes to substantial environmental pollution. At the same time, the U.S. government offers subsidies to domestic steel producers. Under such a situation World Trade Organization rules permit the U.S. government to implement the ban on the import of Nicaraguan steel.

Which of the following functions of money would prove rather useless if inflation were extremely high?

A) medium of exchange B) store of value C) standard of value D) all of the above

Suppose the production function for coffee (C) is C = min(B,W), where B = beans in pounds and W = water in gallons. Suppose the price of water is $.10 per gallon and the price of beans is $10 per pound. The cost minimizing combination of beans and water for C = 200 is

a. B = 200, W = 2000 b. B = 2000, W = 200 c. B = 100, W = 100 d. B = 200, W = 200