The theory of purchasing power parity suggests that, in the long-run, exchange rates are determined by ________
A) relative interest rate levels
B) relative price levels
C) the GDP values for the two countries
D) the most significant monetary authorities, including the Federal Reserve, European Central Bank, Bank of England and the Bank of Japan
B
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The Herfindahl-Hirschman Index is the ________ of the percentage market share of each firm summed over the largest 50 firms in a market
A) sum B) square C) square root D) cube E) negative
The price elasticity of demand for Rosie's Roses fresh flowers the week of Valentine's Day is 1.10 and is 1.60 other days of the year. If Rosie's Roses faces a constant marginal cost of $0.75 per rose, what is the profit-maximizing off-peak load price to charge on days not on the week of Valentine's Day?
A) $2.00 B) $5.00 C) $8.50 D) $1.25
Suppose that price is below the minimum average total cost (ATC) but above the minimum average variable cost (AVC), and the market price is expected to rise at least to ATC in the near future. In the short run, a firm that is a price taker would:
a. immediately shut down and get out of the industry. b. continue to produce a quantity such that marginal revenue equals marginal cost. c. shut down temporarily, in hopes of restarting in the near future. d. cut price and expand output in hopes of achieving economies of scale
As economic activity progresses through successive rounds of the multiplier, the additions to national income become larger and larger
Indicate whether the statement is true or false