Suppose in the city of Blacksburg, music stores operate in a monopolistically competitive market. If the price of CDs in Blacksburg is currently equal to $20 per CD and the average cost of CDs is $15, in the long run we expect the price of CDs to:
A. increase.
B. stay the same.
C. decrease, and the average cost of selling CDs to increase.
D. decrease, and the average cost of selling CDs to decrease.
Answer: C
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If other factors are held constant, an increase in the price level
A) causes desired net export spending to rise. B) causes the real value of the money to increase. C) causes desired net export spending to fall. D) induces people to spend their money faster.
Comparative advantage indicates that:
a. specialization and exchange will cause trading partners to reduce their joint output. b. a nation can gain from trade even when it is at an absolute disadvantage in producing all goods. c. trade with low-wage countries will pull down the wages of workers in high-wage countries. d. all of these.
Exporting a good at a price below its cost of production is defined as
a. efficiency b. dumping c. diversification d. retaliation e. tariffs
Inception
What will be an ideal response?