What are the terms of exchange and how are these terms related to the price?
What will be an ideal response?
The terms of exchange are the terms under which trading takes place. Usually, the terms of exchange specify the price at which the good is traded, which is determined by the interaction of supply and demand.
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If the supply curve for housing is perfectly inelastic, a reduction in demand will cause the equilibrium price to: a. rise and the equilibrium quantity to fall
b. rise and the equilibrium quantity to stay the same. c. fall and the equilibrium quantity to fall. d. fall and the equilibrium quantity to stay the same.
The adult population of a country is 50 million. 35 million form part of its labor force. The labor-force participation rate in this country is _____
a. 50% b. 30% c. 70% d. 35%
What is the source of market power for a monopolistically competitive firm?
Pedro goes to the local farmer's market and is just as happy buying corn from the first vendor as he is from the second vendor. This example describes which of the following characteristics of perfect competition?
A. large number of small firms B. homogeneous product C. very easy entry and exit D. differentiated product