Changes in relative prices occur when
A) all prices move together.
B) all exchange rates move together.
C) product prices change at different rates.
D) exchange rate appreciation is greater than price appreciation.
C
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A lottery promises a $250,000 prize. But the prize money is paid out in $50,000 annual installments with the first installment received today. The winner is offered the option of an immediate lump-sum payment. If the interest rate remains at 10 percent for the entire period, what is the smallest amount the winner should accept?
A. $189,540 B. $192,970 C. $208,494 D. $225,000
If the natural monopoly shown in the figure above is unregulated, it will sell
A) 2 million units. B) 3 million units. C) 4 million units. D) 5 million units.
Assume you set up a sole proprietorship and your lawyer tells you that as the owner you will face unlimited liability. What does that mean?
A) There is no legal responsibility of the business in case a customer sues, as the business is legally untouchable. B) You are liable for organizing the business. C) You could stand to lose your personal wealth if the business goes bankrupt. D) None of these explain what unlimited liability means.
While the __________ is not important, the _________ can have a big effect on economic behavior.
A. price level; unpredicted change in the price level B. unpredicted change in the price level; price level C. price level; predictable change in the price level D. predictable change in the price level; price level