Suppose that firms are located in a circle on an island. You are given transportation costs, fixed costs, variable costs, and demand (assume that customers are spread evenly along the circle). As the firm's fixed costs increase,
A. the number of firms will fall in the long run.
B. the number of firms will stay the same in the long run.
C. the number of firms will rise in the long run.
D. It is impossible to tell from the information given.
Answer: A
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If a bank's deposits at the Fed increase by $10 million, then
A) both the bank's liabilities and the Fed's liabilities increase by $10 million. B) the bank's assets increase by $10 million, but there is no change at the Fed since it does not really have assets or liabilities. C) the bank's assets increase by $10 million and the Fed's liabilities increase by $10 million. D) both the bank's assets and the Fed's assets increase by $10 million.
If wages are higher in the United States than in Brazil, then:
A) trade is still beneficial to the United States and Brazil. B) Brazil will not have a comparative advantage in the production of any good. C) the United States cannot have a comparative advantage in the production of any good. D) trade with Brazil will clearly lower wages in the United States.
The table below shows the number of labor hours required to produce one umbrella and one bushel of corn in the United Kingdom and the rest of the world. Calculate the opportunity cost of producing an umbrella in the rest of the world. Labor hours to make:In the United KingdomIn the Rest of the World1 umbrella3.002.001 bushel of corn1.000.25
A. Three bushels of corn B. Eight bushels of corn C. 1/3 of a bushel of corn D. 1/8 of a bushel of corn
The more product differentiation in the market, the ________ the firm specific demand curve. The less product differentiation in the market, the ________ the firm specific demand curve.
A. steeper; flatter B. flatter; steeper C. more concave; more convex D. more convex; more concave