Exhibit 21-6 Dollars per British pound
QuantityDemanded
Dollarsper Pound
QuantitySupplied
200
5
600
240
4
480
300
3
410
360
2
360
390
1
330
In Exhibit 21-6, the equilibrium exchange rate is:
A. 5.
B. 4.
C. 3.
D. 2.
Answer: D
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A competitive firm's shutdown price is equal to the minimum value of the firm's
a. marginal cost. b. average cost. c. average variable cost. d. fixed and sunk costs.
Investment spending will increase when
A) the interest rate rises. B) the corporate income tax increases. C) firms become more pessimistic about earning future profits. D) business cash flow increases.
The demand curve for a perfectly competitive firm is horizontal because
A) consumers are willing to pay any price to obtain its product. B) its production decisions cannot influence the market price. C) the firm profits from setting its price higher than the market price. D) its product is easy for consumers to differentiate from those of other firms.
Economic systems differ according to which two main characteristics?
A. Who owns the factors of production and the methods used to coordinate economic activity.
B. The technology used in production and the quantity and quality of natural resources.
C. How goods are produced and who gets them.
D. The political system in place and the degree of scarcity facing the economy.