If the demand for air travel were to change so that business travelers and vacationers have the same price elasticity of demand for air travel
A) airlines would charge the same price to each type of flyer.
B) airlines would still charge business flyers a higher fare since the traveler's employer pays anyway.
C) airlines would be driven out of business.
D) airlines would counter by charging vacationers a higher fare.
A
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Under the theory of purchasing power parity, an increase in the U.S. price level of 10% relative to the Japanese price level will result in
A) a 10% appreciation of the yen. B) a 10% appreciation of the dollar. C) an appreciation of the yen by an amount that depends upon what happens to the real exchange rate. D) an appreciation of the dollar by an amount that depends upon what happens to the real exchange rate.
The following table shows the relationship between output and number of workers in the short run. If the wage is $50/day, find marginal cost of production
Number of Workers Output 0 0 1 50 2 110 3 300 4 450 5 590 6 665 7 700 8 725 9 740 10 735
An increase in the real rate of interest that can be earned on U.S. investments above the rate that can be earned on investments in India would:
a. increase the price of the dollar in Indian rupees. b. increase the supply of dollars by those holding U.S. dollars. c. decrease the equilibrium exchange rate of Indian rupees per dollar. d. all of these.
In monopolistic competition, there are no brands, all the producers produce only identical, generic products
a. True b. False Indicate whether the statement is true or false