Assume that Brazil and Mexico have floating exchange rates. All else held constant, if the price level is stable in Mexico but Brazil experiences rapid inflation then ________.
A. the Brazilian real will appreciate
B. the Brazilian real will depreciate
C. gold bullion will flow into Brazil
D. the Mexican peso will depreciate
Answer: B
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If a firm's production function is Leontief and the price of capital goes down, the:
A. cost-minimizing combination of capital and labor does not change. B. firm must use less capital in order to minimize the cost of producing a given level of output. C. firm must use more capital in order to minimize the cost of producing a given level of output. D. firm must use less labor in order to minimize the cost of producing a given level of output.
According to utility theory you would consume more and more of a service until your marginal utility
A. fell to the level of price. B. rose to the level of price. C. was less than price. D. was more than price.
Monopolistically competitive firms have downward-sloping demand curves. In the long run, monopolistically competitive firms earn zero economic profits. These two characteristics imply that in the long run
A) monopolistically competitive markets achieve productive efficiency. B) monopolistically competitive markets achieve allocative efficiency. C) monopolistically competitive firms earn economic profits. D) monopolistically competitive firms have excess capacity.
At many amusement parks, customers who enter the park after 4 p.m. receive a steep discount on the price they pay. This is a type of price discrimination because the amusement park charges a lower price to
a. people who have a more elastic demand for amusement parks. b. people with 9-to-5 jobs. c. students who can't visit until after 4 p.m. anyway. d. people who have a more inelastic demand for amusement parks.