Author Question: Doug's Dog Grooming is a perfectly competitive firm charging 5 per dog grooming. Doug's Dog ... (Read 158 times)

Zoey63294 · **on:** Jun 29, 2018

Doug's Dog Grooming is a perfectly competitive firm charging 5 per dog grooming.

Doug's Dog Grooming has the total and marginal product of labor schedules in the above table and can hire workers from a perfectly competitive labor market for 15 per hour. What is the value of marginal product of the third worker? A) 5
B) 25
C) 15
D) 375

Question 2

If the Fed wants to lower the U.S. exchange rate, what action should it take in the foreign exchange market? Why does the action lower the exchange rate?

What will be an ideal response?

ebonylittles · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

B

Answer to Question 2

To lower the exchange rate, the Fed should sell dollars and buy foreign currency. By selling dollars, the Fed increases the supply of dollars, which lowers the U.S. exchange rate.