The Supply Function for Good X Is Given by Q_x^s

question 93

Multiple Choice

The supply function for good X is given by Q_x^s = 200 + 4P_X - 3P_Y - 5P_W, where P_X is the price of X, P_Y is the price of good Y and P_W is the price of input W. If P_X = 500, P_Y = 250, P_W = 30, then the supply curve is

• A) Q_x^s = 1300.
• B) Q_x^s = -700 + 4P_x.
• C) Q_x^s = -550 + 4P_x.
• D) Q_x^s = 150 + 4P_x.

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Definitions:

Market for Euros

A foreign exchange market where Euros are traded against other currencies.

U.S. Dollar

The official currency of the United States, widely used as a benchmark in international trade and considered a key global reserve currency.

Flexible Exchange-Rate System

A currency valuation system where the value of a currency is allowed to fluctuate in response to foreign exchange market mechanisms.

Foreign-Exchange Reserves

Stockpiles of foreign currencies maintained by a nation’s central bank. Obtained when the central bank sells local currency in exchange for foreign currency in the foreign exchange market.