If a change in the price of one good does not cause a shift in the demand curve of another good, then the two goods are:
A. substitutes.
B. complements.
C. normal.
D. not related.
C. normal.
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If a firm enjoys producer surplus in perfectly competitive Market A of $1000 and would enjoy producer surplus in perfectly competitive Market B of $1200, the firm would consider moving to Market B if
A) fixed costs are greater than $100 in Market A. B) fixed costs are less than $200 in Market B. C) fixed costs are less than $300 but greater than $200 in Market B. D) fixed costs in Market B are less than the fixed costs in Market A plus $200.
The idea that tariffs should be imposed to protect new and developing industries is referred to as
A) the start-up argument. B) the infant industry argument. C) the incubator business theory. D) the new markets theory.
You receive $500 today which you plan to save for two years. Also, in two years you will be given another $500 . If the interest rate is 5 percent, what is the present value of the payment of $500 today and the $500 in two years?
a. $500(1.05)2 + $500/(1.05)2 b. $500(1.05)2 + $500 c. $500 + $500/(1.05)2 d. $500 + $500
Under a fixed exchange standard, if the domestic demand for foreign exchange increases
A) the central monetary authority must meet the demand out of its reserves. B) the central monetary authority must increase the supply of domestic money. C) the fixed exchange standard will breakdown. D) inflation will increase. E) the domestic currency must be depreciated.