The idea that similar foreign and domestic goods, or baskets of goods, should have the same price when priced in terms of the same currency is called
A. equity.
B. efficiency.
C. the tragedy of the commons.
D. purchasing power parity.
Answer: D
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The curve that shows the demand for labor for a purely competitive firm is
A) VMP. B) MP. C) MC. D) W/MP.
Which of the following is not always correct for a closed economy?
a. National saving equals private saving plus public saving. b. Net exports equal zero. c. Real GDP measures both income and expenditures. d. Private saving equals investment.
Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has decreased?
A. A B. B C. neither graph D. both graphs
Use the following graph to answer the next question.
The graph shows the cost curves for a perfectly competitive firm. If the market price of the product is $1.25 per unit, then the firm will produce how many units to maximize profits in the short run?
A. 15 B. 20 C. 0 D. 35