Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and current international transactions in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and current international transactions become more positive (or less negative).
b. The real risk-free interest rate falls, and current international transactions become more negative (or less positive).
c. The real risk-free interest rate rises, and current international transactions remain the same.
d. The real risk-free interest rate rises, and current international transactions become more negative (or less positive).
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
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A) if marginal cost exceeds marginal revenue, profits will increase if output decreases. B) if marginal revenue exceeds marginal cost, profits will increase if output decreases. C) there are several different price and output combinations that maximize profit. D) marginal revenue will be greater than price if demand is elastic. E) marginal revenue will be greater than price if demand is inelastic.
If the quantity desired of something exceeds the amount available at zero price, that item is called
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Suppose Larry's Lariats produces lassos in a factory, and uses nine feet of rope to make each lasso. The rope is put into a machine that automatically cuts it to the right length, then seals the ends to prevent fraying. The rope is then hand tied, dipped, and wound before being placed in a packaging machine to prepare it for retail sale. Which of the following would be considered a fixed cost for this company?
A. Employee wages B. The cost of rope C. The packaging material D. None of these would be considered a fixed cost.
Water is plentiful in most of the world, so its price and total utility are low
a. True b. False Indicate whether the statement is true or false