Variability in exchange rates of currencies used in international trade
a. causes a complete breakdown of trade.
b. renders the theory of gains from trade null in practice.
c. brings with it a host of complications in trade policy.
d. has no impact on trade.
c
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When a natural monopoly is regulated using an average cost pricing rule, what can you say about the firm's profit and the market's efficiency?
What will be an ideal response?
Suppose a market were currently at equilibrium. A rightward shift of the demand curve would cause
A) an increase in price but a decrease in quantity. B) a decrease in price but an increase in quantity. C) an increase in both price and quantity. D) a decrease in both price and quantity.
Bounded rationality suggests that
A) individuals might make "incorrect" decisions because they are unable to consider all possible options. B) individuals would rather have less choice to more choice. C) rational decisions can only be made when choices are restricted. D) individuals are happier when their choices are restricted or "bounded."
What factors can cause the portfolio demand for money to increase?
What will be an ideal response?