The invention of parity price ratios was designed to protect farmers' purchasing power. Over the years, these parity price ratios have
a. been fixed at 100 percent
b. increased to approximately 125 percent of their initial value set in 1910–1914
c. been increasing at approximately 25 percent per year
d. been falling and are less than 50 percent of the 1910–1914 ratio
e. been volatile, increasing and decreasing sometimes dramatically, but still averaging approximately 100 percent of 1910–1914 levels, which was the long-run target
D
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Suppose the conditions of the first welfare theorem hold. If the government redistributes income prior to production and trade occurring, the market outcome (resulting from production and trade) will be efficient so long as no deadweight loss is produced in the levying of redistributive taxation.
Answer the following statement true (T) or false (F)
Total fixed cost divided by the level of output yields
a. average variable cost per unit b. average fixed costs per unit c. marginal cost per unit d. average total cost per unit e. marginal productivity per unit of fixed resource
Ronald Coase's insight regarding the firm was that
a. firms tend to be more profitable when economies of scale are greater b. uncertainty and information are the keys to perfect competition c. perfectly competitive firms tend to displace monopolies d. economic activity is best understood in terms of the transaction costs of exchange e. consumers often carry out transactions directly with resource suppliers
If demand is elastic, a decrease in price leads to a decrease in total revenue.
Indicate whether the statement is true or false.