Relative price changes indicate
A) all prices move together.
B) all exchange rates move together.
C) some prices increase faster than others.
D) exchange rates appreciate faster than prices change.
C
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When a firm increases output and the costs rise disproportionately slower, then the long-run average cost curve is __________ and the firm is experiencing __________ .
A) upward sloping; diseconomies of scale
B) downward sloping; constant returns to scale
C) downward sloping; economies of scale
D) horizontal; constant returns to scale
During the crisis of 2008 housing prices ________ and stock prices ________. (Fill in the blank)
a. rose sharply; fell sharply b. fell sharply; rose sharply c. fell sharply; fell sharply d. rose sharply; rose sharply
A firm invests in a new machine that costs $5,000 a year but is expected to produce an increase in total revenue of $5,200 a year. The current real rate of interest is 7%. The firm should
A. undertake the investment, because the expected rate of return of 10% is greater than the real rate of interest. B. not undertake the investment, because the expected rate of return of 4% is less than the real rate of interest. C. not undertake the investment, because the expected rate of return of 6% is less than the real rate of interest. D. undertake the investment, because the expected rate of return of 8% is greater than the real rate of interest.
Refer to Scenario 7.5 below to answer the question(s) that follow.SCENARIO 7.5: You own and are the only employee of a company that customizes bicycles. Last year your total revenue was $60,000. Your costs for rent and supplies were $25,000. To start this business you invested an amount of your own capital that could pay you a $45,000 a year return.Refer to Scenario 7.5. During the year your economic costs were
A. $25,000. B. $35,000. C. $45,000. D. $70,000.