In July 2008, a British pound could buy $2. By October 2008, a pound could buy $1.55. Over the four months, the
A) pound depreciated against the dollar.
B) the real exchange rate did not change.
C) pound appreciated against the dollar.
D) the U.S. inflation rate increased.
A
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If there are 1,000 rutabaga farms, all perfectly competitive, an increase in the price of fertilizer used for growing rutabagas will
A) have no effect on the total quantity of rutabagas supplied, because no farm has enough market power to raise the price. B) have no effect on the total quantity of rutabagas supplied, because each farm's supply curve is a vertical line. C) decrease the total quantity of rutabagas supplied, because each farm's supply curve shifts leftward. D) reduce the total quantity of rutabagas supplied, because each farm's supply curve is a horizontal line and will shift upward.
A consequence of increasing marginal costs of producing digital music players in Japan is
A) Japan will stop short of complete specialization in the production of digital music players. B) Japan will likely impose trade restrictions on imported digital music players. C) Japan will not export digital music players. D) Japan will import digital music players from countries that don't experience increasing marginal costs.
Rational expectations involve the assumption that
A) market participants make use only of information on the past performance of an asset in determining what they believe its price should be. B) market participants rarely change their minds about the correct price of an asset. C) financial markets are good at increasing liquidity, but poor at transmitting information. D) market participants makes use of all available information.
Which of the following will increase the break-even quantity?
a. A decrease in overall fixed costs b. A decrease in the marginal costs c. A decrease in the price level d. An increase in price level