Which of the following pricing practices, if proved, would prove a firm engaged in predatory pricing?
A) The firm sets prices below marginal cost per unit.
B) The firm sets prices below sunk cost per unit.
C) The firm sets prices below total cost per unit.
D) The firm sets prices low enough to drive all its competitors out of business.
E) None of the above would prove predatory pricing had occurred.
E
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For each watch that Switzerland produces, it gives up the opportunity to make 50 pounds of chocolate. Germany can produce 1 watch for every 100 pounds of chocolate it produces
Which of the following is true about the comparative advantage between the two countries? A) Switzerland has the comparative advantage in chocolate. B) Germany has the comparative advantage in watches and chocolate. C) Germany has the comparative advantage in watches. D) Switzerland has the comparative advantage in watches.
A simple macroeconomic model might explain how an increase in the demand for new housing would lead to a decrease in the rate of unemployment. In such a model, which of these variables is likely to be exogenous?
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