A particular brand of shampoo costs 6 Canadian dollars in Toronto. The nominal exchange rate is about 1.2 and the real exchange rate is .90 . These numbers imply that the U.S. dollar price of the same shampoo is about
a. $7.99
b. $6.49
c. $5.39
d. $4.49
d
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Borrowed funds that are to be repaid in a year or more are referred to as:
A) long-term debt. B) loanable funds. C) annual debt. D) stockholders' equity.
In a recent fare war, America West reduced the price of its roundtrip airfare from Charlotte, North Carolina, to New York City from $198 to $138 to match American Airlines. America West matched the fare reluctantly, saying it would cost the company
millions of dollars in revenue for those tickets to be sold for less. American, on the other hand, believed the fare cut would increase its revenue even if rival airlines matched the lower fares. What different assumptions about the underlying price elasticity of demand for airline tickets on that route did each airline believe true?
Suppose that the demand curve for apples is downward sloping and the price per pound decreases from $1.25 to $1.00. We would then expect
A) the demand for apples to decrease. B) the quantity of apples demanded to fall. C) the demand curve to shift toward the origin. D) the quantity of apples demanded to increase.
Use the above figure. The ATC at output 5 is
A. $25.00. B. $2.00. C. $5.00. D. $3.00.