Assume that your roommate, Vanessa, is very messy, which is not a crime at your campus. Suppose she gets a $100 benefit from being messy but imposes a $200 cost on you. The Coase theorem would suggest that an efficient solution would be for you to ()
A. pay your roommate at least $100 but no more than $200 to clean up after herself.
B. pay your roommate at least $201 to clean up after herself.
C. charge your roommate at least $100 to have you clean up after her.
D. charge your roommate at least $200 but no more than $300 to keep you from complaining about the mess.
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Pigovian taxes are preferred over regulations to deal with pollution because Pigovian taxes ()
A. reduce pollution at a lower cost to society.
B. raise revenue and reduce pollution simultaneously, although efficiency is reduced.
C. obtain faster results than regulations.
D. allow for an accurate monitoring of pollution levels.
Which of the following is included in the supply of dollars in the market for foreign-currency exchange? ()
A retail outlet in Afghanistan wants to buy watches from a US manufacturer.
B. A US bank loans dollars to Blair, a US resident, who wants to purchase a new car made in the United States.
C. A US based mutual fund wants to purchase stocks issued by a Polish company.
D. A firm in Kenya wants to buy wheat from a US firm.
A country has $60 million of saving and domestic investment of $40 million. Net exports are ()
A. $20 million.
B. -$20 million.
C. $100 million.
D. -$100 million.
In the US a candy bar costs 50 cents. The nominal exchange rate is 6 Chinese yuan per dollar. If the real exchange rate is 0.60, what is the price of a candy bar in China ()
A. 7.2 yuan
B. 6 yuan
C. 5 yuan
D. 3.6 yuan
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