Refer to Figure 4-4. The figure above represents the market for ...

[DelorasTo]

Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. Which of the following is true?
 
  A) Both 10,000 and 30,000 are economically inefficient rates of output.
  B) If the price of iced tea is 3, consumers will purchase more than the economically efficient output.
  C) If the price of iced tea is 3, the output will be economically efficient but there will be a deadweight loss.
  D) If the price of iced tea is 3, producers will sell 30,000 units of iced tea but this output will be economically inefficient.

Question 2

The decline in the value of the yen in 2014 and 2015 occurred as a result of the Japanese central bank, the Bank of Japan, following an expansionary monetary policy.
 
  Investors expected that the result would be lower nominal Japanese interest rates and a higher inflation rate. In response, investors ________, causing the value of the yen to decline against the dollar.
  A) bought Japanese yen and sold U.S. dollars B) bought Japanese yen and bought U.S. dollars
  C) sold Japanese yen and bought U.S. dollars D) sold Japanese yen and sold U.S. dollars

[cpetit11]

Answer to Question 1

A

Answer to Question 2

C

[DelorasTo]

Thank you

[cpetit11]

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