Refer to the figure above. What is the equilibrium quantity of bottled water?

In the figure above, the richest 40 percent of households receive ________ of total income

A) 70 percent B) 30 percent C) 60 percent D) 80 percent

Suppose a basket of goods costs $400 in the United States and £200 in Britain. If the exchange rate is $1/pound, what will happen in the foreign exchange market, according to the purchasing power parity theory?

a. The market will go further out of equilibrium because of increased activity. b. An increase in demand for pounds will lead to an increase in the price of pounds. c. An increase in demand for dollars will lead to an increase in the price of dollars. d. An increase in demand for dollars will lead to a decrease in the price of dollars. e. An increase in demand for pounds will lead to a decrease in the price of pounds.