Small devaluations are usually sufficient to stem capital flight
Indicate whether the statement is true or false
FALSE
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Many fast-food restaurants have signs on their cash registers that read, "Your meal is free if the cashier does not give you a receipt". What might be the purpose of such a sign? Hint: there is a moral hazard problem here
What will be an ideal response?
Economists and accountants have very different definitions of profit.
Answer the following statement true (T) or false (F)
A firm maximizes profits by charging a lower price to foreign buyers if
A. it has a greater monopoly power in the foreign market than it has in its home market. B. the buyers in the home country have access to cheaper imports from the rest of the world. C. the foreign demand for its good is more elastic than the domestic demand. D. the size of the foreign market is much larger than the home market.
Which of the following statements about the average total cost curve is false?
A. The marginal cost curve crosses the average total cost curve at the point at which average total cost is minimized. B. It is initially downward sloping because increases in quantity make the average fixed cost smaller. C. It eventually becomes upward sloping because the law of diminishing returns sets in. D. It is always downward sloping because the average fixed costs will always decrease as quantity increases.