A stronger dollar would be a good policy if the U.S. government wanted to:
A. increase exports and reduce the trade balance.
B. reduce imports and increase the trade balance.
C. increase the trade balance and lower inflation.
D. reduce the trade balance and lower inflation.
Answer: D
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If a country has
A) an absolute advantage in producing a good, it definitely also has a comparative advantage in producing that good. B) an absolute advantage in producing a good, it might or might not have a comparative advantage in producing that good. C) a comparative advantage in production of a good, it must also have an absolute advantage in producing that good. D) an absolute advantage in producing a good, it definitely will not have a comparative advantage in producing that good. E) None of the above answers is correct.
When consumers have asymmetric information and when search costs and the number of firms are large, a single-price equilibrium in a competitive market
A) is impossible. B) occurs when price equals average cost. C) occurs when price equals marginal cost plus the search cost. D) occurs when the price is the price a monopoly would set.
This table shows the total costs for various levels of output for a firm operating in a perfectly competitive market.PriceQuantityTC$500$10.00$501$20.00$502$27.50$503$77.50$504$147.50$505$250.00According to the table shown, when 1 unit is produced:
A. marginal revenue exceeds marginal costs, and the firm should produce more. B. marginal costs exceed marginal revenue, and the firm should produce more. C. marginal revenue exceeds marginal costs, and the firm should produce less. D. marginal costs exceed marginal revenue, and the firm should produce less.
In the long run, the purchasing power parity theory predicts exchange rates accurately, particularly when there is a large difference in inflation rates across countries
Indicate whether the statement is true or false