Explain why gold, despite its value, is difficult to use as a medium of exchange
What will be an ideal response?
Gold is an example of a commodity money. With a commodity money, its value depends on the quality of the commodity. Gold is not necessarily standardized, so its quality can vary. The less pure gold is, the less value it has, and since purity can be difficult to readily check, it would be difficult to use as an accurate medium of exchange.
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Suppose there is news that indicates that gasoline supplies might suddenly become disrupted by a truckers' union strike
What would you expect would happen to the demand for gasoline in the present? How might consumers change their behavior and why? What impact would this news have on the price of gasoline immediately? Would it matter whether the news story was accurate?
Suppose a firm has multiproduct cost function that is additive such that C(q1,q2 ) = C(q1 ) + C(q2 ). What is the degree of economies of scope (SC) for this firm?
A) 2 B) 1 C) Zero D) Negative