When a country allows trade and becomes an exporter of a good, which of the following is not a consequence?
a. The price paid by domestic consumers of the good increases.
b. The price received by domestic producers of the good increases.
c. The losses of domestic consumers of the good exceed the gains of domestic producers of the good.
d. The gains of domestic producers of the good exceed the losses of domestic consumers of the good.
c
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Economies of scale are indicated by
A) declining long-run AVC. B) declining long-run AFC. C) declining long-run AC. D) declining long-run TC.
Some prescription drugs sell for more in the United States than they do in other countries. Which of the following statements about this issue is most likely to be true?
a. Drug companies are engaging in price discrimination, and this practice certainly reduces global social welfare. b. Global social welfare could be improved if the price in the United States were reduced to the price charged in other countries. c. Global social welfare could be improved if the price in the other countries were increased to the price charged in the United States. d. Drug companies are engaging in price discrimination, but this might improve global social welfare if it gives more people access to the drugs.
The following graph shows average fixed costs, average variable costs, average total costs, and marginal costs of production.
Why does the distance between curves II and III get smaller as quantity increases?
A. Average fixed cost is declining. B. Average fixed cost is increasing. C. Average variable cost is increasing. D. Marginal cost is increasing.
A basket of goods cost $100 in the U.S. and £65 in the United Kingdom. If purchasing power parity holds, what is the dollar-pound exchange rate?
What will be an ideal response?