Recall the Application about the price competition between satellite and cable TV services to answer the following question(s).Recall the Application. In most cases where satellite TV service is introduced in an area with cable TV service, if the price of cable TV increases, then consumer surplus (in the cable TV market) usually:
A. increases.
B. decreases.
C. drops to zero.
D. becomes negative.
Answer: B
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The purchasing power parity theory
a. is more a predictor of a long-run tendency than of the day-to-day relationship between changes in the price level and the exchange rate b. predicts that exchange rates between two currencies will adjust in the long run to reflect the price level difference between two countries c. is more a predictor of a short-run phenomenon than of a long-run relationship between the price level and the exchange rate between two countries d. is helpful in explaining long-run trends, even though trade barriers and central bank intervention may hinder the usefulness of the theory e. tells us that a country's currency generally will appreciate if its inflation rate is lower than that of the rest of the world
The production possibilities frontier of an economy is based on the assumption that the: a. amount of consumer goods produced in the economy is constant during a given year. b. quality of labor available in the economy is variable during a given year
c. patent laws applicable in the economy are constant during a given year. d. level of technology available in the economy is variable during a given year. e. economy can either produce capital goods or consumer goods during a given year.
Market failure is a term used to describe what happens when market arrangements do not allocate resources efficiently
a. True b. False Indicate whether the statement is true or false
The highest-income fifth of the U.S. population earns more than 50 percent of all income.
Answer the following statement true (T) or false (F)