Refer to Figure 29-1. Italians cut back on smoking and cut their demand for American cigarettes in half. Assuming all else remains constant, this would be represented as a movement from
A) A to D. B) D to C. C) B to C. D) B to A.
D
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In monopolistic competition, the demand curve for a firm's product is negatively sloped because of
A) barriers to entry. B) no barriers to entry. C) product differentiation. D) economies of scale.
An advantage of a flexible exchange rate system relative to a fixed system is that in a flexible rate system
a. currency speculation will be reduced. b. balance of payments surpluses and deficits can be dealt with using fiscal policy, not monetary policy. c. inflation will be minimized by the "discipline of the balance of payments." d. the price of imported goods will be kept relatively low. e. none of the above.
Below the short-run shutdown price, the firm
A) is earning positive economic profits. B) is earning negative economic profits. C) is making a normal rate of return on its capital investment. D) may be earning a positive or negative economic profits depending upon costs.
Opportunity cost is the best alternative sacrificed for a chosen alternative
a. True b. False Indicate whether the statement is true or false