A price index is
A. a measurement showing the cost of a bundle of goods at a point in time.
B. a decrease in the overall price level.
C. a sustained increase in the overall price level.
D. a measurement showing how the average price of a bundle of goods changes over time.
Answer: D
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Calculate the relative price of a basket of goods sold in the United States and Japan in terms of dollars if the yen/$ exchange rate = 90. The basket costs $100 in the United States and ¥9,000 in Japan. The relative price is:
a. 0.9, which means the U.S. basket costs more. b. 1.1010, which means the Japanese basket costs more. c. 0.9, which means the Japanese basket costs more. d. 1.0, which means they both cost the same.
Which of the following is a disadvantage of the European Monetary Union to member countries?
A. Less monetary independence for each member B. Lower cost of exchanging currencies C. A reduced likelihood of conflict between members D. Greater price transparency
A natural monopoly that is NOT regulated will choose to produce at the
A. point at which marginal revenue equals marginal cost. B. point at which marginal cost is above average total cost. C. point at which the demand curve intersects the long-run average cost curve. D. minimum point of the long-run average cost curve.
In a successive monopoly structure, the profit-maximizing wholesale price is equal to the difference between the ________ and the ________ of distribution.
A) wholesale demand; marginal cost B) retail demand; marginal revenue C) wholesale demand; marginal revenue D) marginal revenue; marginal cost