If a firm in a perfectly competitive market raises its price
A. it will sell more products.
B. it will sell nothing.
C. its sales will remain unchanged.
D. it will sell fewer products.
Answer: B
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If the yen to dollar exchange rate is 115, the U.S. price index is 140, and the Japanese price index is 165, what is the U.S. real exchange rate?
A) 74.52 B) 97.58 C) 135.55 D) 200.87
In the above figure, if a subsidy is granted that generates an efficient allocation of resources, then the output level will be
A) zero. B) 50 units per week. C) 150 units per week. D) 250 units per week.
Inflation is an economic problem because it
A) leads inevitably to unemployment. B) makes prices less useful as signals for resource allocation. C) leads to recession. D) results in rapid increases in the money supply.
Which of the following is an example of a normative statement?
A) Since this good is bad for you, you should not consume it. B) This good has bad health effects. C) If you consume this good, you will get sick. D) People usually get sick after consuming this good.