In regards to monopolistic competition, some economists argue that consumers are willing to pay a higher price in order to enjoy a wider selection of goods and services
a. True
b. False
A
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Health problems prevent people from working harder, which can lower a country's total income. This indicates that in effect, health problems
A) shift a country's production possibilities frontier inward. B) increase the incentive to work. C) decrease consumer surplus. D) are a primary cause of price decreases.
If a price ceiling of $3 is imposed on gasoline and the market price is $2,
a. the price of gasoline will rise. b. the price of gasoline will fall. c. the price of gasoline will remain unchanged. d. the demand for gasoline will increase.
In the Primary Metals industry, it is estimated that the elasticity of output with respect to labor is 0.51 and the elasticity of output with respect to capital is 0.73
These two measures indicate that the primary metals industry is characterized by A) decreasing returns to scale. B) constant returns to scale. C) increasing returns to scale. D) no returns to scale.
The purchasing power parity theory of exchange rate determination maintains that
a. the exchange rate between two nations' currencies is determined by the percent of gold that backs each nation's currency. b. the exchange rate between two nations' currencies adjusts to reflect differences in the price levels in the two nations. c. in the short run, exchange rates are determined by central bank intervention in the currency markets. d. the exchange rate between two currencies is determined by the debt that each nation owes to the World Bank.