Why does anyone demand foreign currency?
A. International trade in goods and services
B. International trade in financial assets
C. Purchases of physical assets overseas
D. All of the above are correct.
Answer: D
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A perfectly competitive firm has a total revenue curve that is
A) upward sloping with an increasing slope. B) downward sloping with a constant slope. C) upward sloping with a decreasing slope. D) upward sloping with a constant slope.
In the Keynesian model, if interest rates fall below what people consider normal, households will respond by
A) decreasing the saving rate. B) reducing the saving rate. C) holding more money. D) holding more bonds.
A price ceiling that sets the price of a good below market equilibrium will cause
a. an increase in quantity demanded of the good. b. a decrease in quantity supplied of the good. c. a shortage of the good. d. all of the above.
Suppose Acme and Mega produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product.
Suppose Acme and Mega decide to collude and work together as a monopolist with each firm producing half the quantity demanded by the market at the monopoly price. If Mega cheats on the agreement by reducing its price to $1 while Acme continues to comply with the collusive agreement, then Mega's economic profit will be ________.
A. $150 B. $200 C. $100 D. $75