A country will not trade unless
A. It has an absolute advantage.
B. Its balance of trade is in a surplus position.
C. The production possibilities increase.
D. The terms of trade are superior to domestic opportunities.
Answer: D
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Why is the distinction between long run and short run less important in monopoly markets?
What will be an ideal response?
Probably the simplest approach to the problem of oligopolistic interdependence is to
A. conduct market experiments. B. assume that rivals will pursue a course most detrimental to the firm concerned. C. ignore the actions of rivals. D. increase the firm’s advertising outlay considerably.
If a tax is levied on the sellers of a product, then the supply curve will
A. shift up. B. become flatter. C. shift down. D. not shift.
A firm with market power faces the following estimated demand and average variable cost functions:Qd = 39,000 - 500P + 0.4M - 8,000PRAVC = 30 - 0.005Q + 0.0000005Q2where Qd is quantity demanded, P is price, M is income, and PR is the price of a related good. The firm expects income to be $40,000 and PR to be $2. Total fixed cost is $100,000. The firm should ________ because ________.
A. operate, P = $60.50 > AVC = $25.50 B. operate, P = $62 > AVC = $22 C. shut down, P = $62 < TVC = $229.50 D. operate, P = $62 > AVC = $17.50