Once a firm has determined the quantity of output it wishes to sell, the maximum price it can charge for each unit is determined by:
A. the demand curve facing the firm.
B. the marginal cost of making the product.
C. the firm's marginal revenue curve.
D. the average cost of making the product.
Answer: A
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A persistent shortage of yen at a given fixed exchange rate (in dollars per yen) is evidence that the yen is ________ versus the dollar. This shortage can be reduced or eliminated through a ________ of the yen
A) overvalued; revaluation B) undervalued; devaluation C) overvalued; devaluation D) undervalued; revaluation
Suppose a company expects prices in general to rise by 5%, but the price of its product rises by 2%. How will the company respond to the price change?
A) It will increase production since it's getting a higher price for the product. B) It will increase production more slowly since it's price is rising more slowly than average. C) It will reduce production since it perceives a relative decline in the demand for its product. D) It will stop production and shut down until prices rise more quickly.
The market structure in which there is interdependence among firms is
A) monopolistic competition. B) oligopoly. C) perfect competition. D) monopoly.
Using the interest rate as a measure of the opportunity cost of holding money, the demand for money curve
A) slopes upward with respect to the rate of interest. B) is not affected by the price level. C) slopes downward with respect to the rate of interest. D) is vertical.