Suppose the government of South Island has fixed the value of its currency, the Islandia, at $0.50 per Islandia, but the market equilibrium value of the Islandia is $0.75 per Islandia. In order to maintain the official value of the Islandia the Central Bank of South Island must either ________ domestic interest rates or supply Islandia, which causes the supply of international reserves to ________.

The change in total revenue that results from a one-unit change in the amount of a variable resource used is

a. average resource cost b. marginal resource cost c. marginal product d. marginal revenue product e. average revenue product

Unions might support a higher minimum wage because:

A. their constitutions obligate them to do so. B. they feel a higher minimum wage will lower labor's tax payments for welfare programs. C. a higher minimum wage makes less-skilled workers less substitutable for union workers. D. the minimum wage is better targeted than are alternative income-maintenance programs.