Refer to the figure above. If the yuan is allowed to float, at exchange rates above E yuan per dollar:
A) the excess supply of dollars in exchange for yuan increases the value of the dollar in the foreign exchange market.
B) the excess supply of dollars in exchange for yuan lowers the value of the dollar in the foreign exchange market.
C) the excess demand for dollars in exchange for yuan lowers the value of the dollar in the foreign exchange market.
D) the excess demand for dollars in exchange for yuan increases the value of the dollar in the foreign exchange market.
B
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A market supply curve is determined by
a. vertically summing individual supply curves. b. horizontally summing individual supply curves. c. finding the average quantity supplied by sellers at each possible price. d. finding the average price at which sellers are willing and able to sell a particular quantity of the good.
Suppose that cookie producers create a positive externality equal to $2 per dozen. What is the relationship between the equilibrium quantity and the socially optimal quantity of cookies to be produced?
a. They are equal. b. The equilibrium quantity is greater than the socially optimal quantity. c. The equilibrium quantity is less than the socially optimal quantity. d. There is not enough information to answer the question.