The law of demand for dollars in the foreign exchange market means that the
A) lower the exchange rate, the greater the quantity of dollars demanded.
B) higher the exchange rate, the smaller the quantity of dollars demanded.
C) lower the exchange rate, the smaller the quantity of U.S. exports demanded.
D) Both answers A and B are correct.
D
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Refer to Figure 5-4. Why is there a deadweight loss?
A) because the marginal social cost of producing each additional unit in excess of Q2 exceeds the marginal benefit B) because the marginal social benefit of producing each additional unit in excess of Q2 exceeds the private cost C) because the marginal private cost of producing each additional unit in excess of Q2 exceeds the marginal benefit D) because the marginal private benefit of producing each additional unit in excess of Q2 exceeds the social cost
If a major league baseball player would be willing to work for $700,000 per year and is currently being paid $1,200,000 per year, that player is earning an annual economic rent of
A) $700,000. B) $1,900,000. C) $1,200,000. D) $500,000.