In New York City, apartment rent can be adjusted only when a tenant leaves. This leads
A. landlords to encourage tenants to stay in their apartments.
B. businesses to build new rental units.
C. tenants to stay in apartments longer than they would otherwise.
D. people to change apartments often.
Answer: C
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Suppose that the price of an identical sport-utility vehicle is $32,000 in U.S. dollars in the United States and $32,000 in Canadian dollars in Canada
Suppose in addition that the exchange rate between Canada and the United States is one Canadian dollar equals $0.75 U.S. dollar. Does purchasing power parity hold for SUVs between the United States and Canada? A) Yes, because SUVs have the same price in each local currency. B) No, because SUVs are more expensive in Canada than the United States. C) No, because SUVs are more expensive in the United States than in Canada. D) Without knowing interest rates, we can't say.
Suppose Chip's Chips produces bags of potato chips. An example of a fixed cost for this company would be:
A. a potato peeling machine. B. the factory building. C. the deep fryer. D. All of these are examples of fixed costs.
Monopolistic competition is characterized by: a. a small number of firms selling differentiated products. b. a large number of firms selling identical products
c. high barriers to entry. d. a large number of firms selling differentiated products.
In analyzing the operation of a firm, an economist assumes the firm wants to
A. maximize total profits. B. maximize total revenue. C. maximize total production. D. maximize total sales.