Which of the following might cause the real value of money to rise in an economy?
a) The government prints $1 million in new bills to finance its spending.
b) The average price of food items rise by 20%.
c) The price of houses and apartment rentals falls by 30%.
d) Other countries in the world demand less of this money.
Ans: c) The price of houses and apartment rentals falls by 30%.
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If a business firm continues to sustain losses, what usually happens in a market economy?
What will be an ideal response?
The following figure shows the domestic demand (Dd) and domestic supply (Sd) curves of mopeds in a country before an import quota is imposed by the government. After the imposition of the quota, the maximum import quantity is QQ.
After the quota is imposed, the domestic consumers
A. lose $22.5 million. B. gain $52.5 million. C. lose $82.5 million. D. lose $7.5 million.
In a contestable market,
A. There are economies of scale that heighten competition. B. An imperfectly competitive industry does not face any potential competition when profits increase. C. Many firms compete in producing a standardized product. D. Barriers to entry and long-run economic profits are low.
Suppose Sun Bakery sells cupcakes and buns, using various equipment and labor to make and deliver its products. Which of the following costs is a variable cost for Sun Bakery?
a. The money paid for its monthly electricity bill b. The money paid as rent on the bakery space c. The money paid to purchase a new mixer d. The money paid to purchase a delivery van