Refer to Figure 22.3 for a perfectly competitive firm. If the market price is $15,
A. The firm will have above-normal profits.
B. Economic profits will be zero.
C. The firm should produce 39 units.
D. The firm should shut down.
Answer: B
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In 2007, interest rates in Germany were 4.7 percent while the inflation rate was 1.7 percent. In 2008, interest rates increased to 5.3 percent and the inflation rate increased to 2.0. As a result, there is
A) a leftward shift in Germany's demand for money curve. B) a downward movement along Germany's demand for money curve. C) a rightward shift in Germany's money supply curve. D) an upward movement along Germany's demand for money curve.
As a consumer allocates income between good A and good B, total utility is maximized when
a. the marginal utility of A = the marginal utility of B b. the marginal utility of A = the marginal utility of B = 0 c. the price of A = price of B d. marginal utility of A/price of A = marginal utility of B/price of B = 0 e. marginal utility of A/price of A = marginal utility of B/price of B
Domestic producers of a good become worse off, and domestic consumers of a good become better off, when a country begins allowing international trade in that good and
a. the country becomes an importer of the good as a result. b. the world price exceeds the domestic price of the good that prevailed before international trade was allowed. c. the country in question has a comparative advantage, relative to other countries, in producing the good. d. total surplus does not change as a result.
A country possesses a comparative advantage in the production of a product if
A) the opportunity cost, in terms of the amount of other products that it gives up to produce this product, is lower than it is for its trading partners. B) it possesses an absolute advantage in the production of this good compared to its trading partners. C) it is able to produce less of this good per worker than its trading partners. D) it can produce more of this good per hour than its trading partners.