One reason purchasing power parity does not exactly hold is that many goods are not traded internationally
Indicate whether the statement is true or false
TRUE
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If a firm is earning zero economic profit, then:
A. the owner will not be able to pay himself or herself a salary. B. the firm's accounting profit is equal to the firm's implicit costs. C. the firm will shut down in the long run, but will continue to operate in the short run. D. the firm's revenues are sufficient to pay its explicit costs, but not its implicit costs.
If the price of gasoline rose 50% during a period in which the general price level rose 100%, economic theory would predict
A) a decline in the quantity of gasoline demanded. B) an increase in the quantity of gasoline demanded. C) a decrease in the demand for gasoline. D) an increase in the supply of gasoline. E) less driving by motorists.
If a firm operates in a imperfectly competitive market, it may be able to price its products in local currencies above world prices for their goods. This is called
A) pricing to market. B) trade war. C) trade stickiness. D) price gauging.
Under perfect competition,
a. a single seller sets the price b. sellers can easily enter or exit the market c. a small number of sellers offer differentiated products d. a government franchise protects sellers e. an intense rivalry between two powerful firms determines the market price