For a natural monopoly, if price is set equal to marginal cost then the firm incurs an economic loss
Indicate whether the statement is true or false
TRUE
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When the price of a good is below the equilibrium price,
A. suppliers are unable to sell as many units as they want; they will cut output and lower prices. B. suppliers can sell as many units as they can produce; they will increase production and raise prices. C. the demand curve shifts down to reach an equilibrium price. D. the supply curve will shift up to reach an equilibrium price.
If the price of a movie rises 3 percent and, as a result, the quantity demanded of video rentals increases 6 percent, then the cross elasticity of demand is
A) 2. B) 1/2. C) -1/2. D) -2. E) 9.
Protectionism is the use of ________ to protect domestic firms from foreign competition
A) cheap labor B) trade barriers C) dumping D) military force
Which of the following is excluded in the current account?
A. goods exports B. goods imports C. capital inflow and outflow D. net unilateral transfers