Suppose the price of good x in country A is lower than the price of good x in country B when no trade is permitted. In the absence of transportation costs, if the supply curve for good x in the two countries is sufficiently elastic, free trade in good x implies that country B will stop producing x.
Answer the following statement true (T) or false (F)
True
Rationale: With sufficiently elastic supply curves, the free trade equilibrium price will lie below the intersection of supply with the vertical axis in country B -- implying no production in country B.
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Under which of the following circumstances would private saving be positive in a closed economy?
A) Y = $6 trillion C = $2 trillion TR = $8 trillion G = $3 trillion public saving = $1 trillion B) Y = $10 trillion C = $5 trillion TR = $2 trillion G = $2 trillion public saving = $1 trillion C) Y = $8 trillion C = $2 trillion TR = $4 trillion G = $2 trillion public saving = $4 trillion D) Y = $9 trillion C = $5 trillion TR = $1 trillion G = $1 trillion public saving = $3 trillion
What is the average cost pricing rule? Why is it not an efficient way of regulating monopoly?
What will be an ideal response?
According to the quantity theory of money, if M's growth is less than Q's, then
a. V falls b. V rises c. P stays the same d. P falls e. P rises
If a firm shuts down, its
a. fixed costs remain unchanged. b. revenue will fall to zero. c. short-run variable costs will fall to zero. d. All of the above are correct.