If the producer of an information product engages in marginal cost pricing, it earns
A) a normal profit.
B) an economic loss.
C) zero economic profits.
D) positive economic profits.
B
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What are Properties of Money?
Technology reduces the average cost of production, so in the long run
i. perfectly competitive firms produce at a lower average cost. ii. the market price of the good falls. iii. firms with older plants either exit the market or adopt the new technology. A) i only. B) i and ii. C) iii only. D) i and iii. E) i, ii, and iii.
Whenever somebody deposits a check from bank A into a checkable deposit at bank B, bank A's reserves ________ and bank B's reserves ________
A) increase; decrease B) increase; increase C) decrease; decrease D) decrease; increase E) do not change; do not change
A firm that buys foreign exchange in order to take advantage of higher foreign interest rates is
A) speculating. B) demonstrating purchasing power parity. C) engaging in interest rate arbitrage. D) responding to fluctuations in the business cycle. E) ignoring the nominal rate of exchange.