Everything else equal, the more rivals a firm has, the
A. less kinked is its demand curve.
B. closer is its equilibrium price to its average variable costs.
C. more differentiated is its product from rivals’ products.
D. more elastic is its demand curve.
Answer: D
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Assuming no change in the nominal exchange rate, how will a decrease in the price level in the United States relative to France affect the real exchange rate between the two countries? (Assume the United States is the "domestic" country.)
A) The real exchange rate will fall. B) The real exchange rate will be unaffected. C) The real exchange rate will rise. D) The impact on the real exchange rate cannot be predicted.
Patty runs a small organic peanut butter company with five employees and local sales of $100,000 per year. She estimates that the shape of her total variable cost curve largely reflects her costs of
a. peanuts b. electricity c. packaging d. labor e. marketing
Which of the following statements is correct?
a. Neither economic theory nor evidence from the U.S. economy suggests that there is a close link between productivity and real wages. b. Economic theory suggests that there is a close link between productivity and real wages, but evidence from the U.S. economy fails to confirm that link. c. Evidence from the U.S. economy suggests a close link between productivity and real wages, but economic theory provides no basis for such a link. d. Both economic theory and evidence from the U.S. economy suggest that there is a close link between productivity and real wages.
Comparative advantage is the ability to
A) perform an activity at a lower opportunity cost. B) determine who your best trading partners are. C) determine the best use of capital goods. D) convince others of the best choices to make in their own self-interest.