The point where a firm lacks enough revenue to cover its variable costs is called the:
a. point of perfect competition.
b. shutdown point.
c. point of no return.
d. fixed cost point.
b. shutdown point.
The intersection of the average variable cost curve and the marginal cost curve, which shows the price where the firm would lack enough revenue to cover its variable costs, is called the shutdown point.
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If it is said that a currency is overvalued against the dollar, it is meant that:
A) the dollar is worth more of that currency than it would have been under a fixed exchange rate regime. B) the dollar is worth less of that currency than it would have been under a fixed exchange rate regime. C) the dollar is worth less of that currency than it would have been under a flexible exchange rate regime. D) the dollar is worth less of that currency than it would have been under a managed exchange rate regime.
Suppose the price elasticity of demand for bouquets of flowers is 4.0. You are charging $8 per bouquet. If you want to increase the quantity of bouquets you sell by 20 percent, what price should you charge?
What will be an ideal response?
Elasticities are often lower in the short run than in the long run
a. True b. False Indicate whether the statement is true or false
Use the following graph to answer the next question.
Assume that Japan and the United States are engaged in a system of flexible exchange rates. If more Japanese tourists decide to visit the United States for their vacations, the yen will ________ and the U.S. dollar will ________.
A. depreciate; depreciate B. depreciate; appreciate C. appreciate; depreciate D. appreciate; appreciate