Assuming that resources are specialized, the opportunity cost of an item increases as the production of it rises. This implies that firms will produce more as
A. the price increases.
B. the price decreases.
C. the opportunity cost is greater than the price.
D. government asks firms to produce more.
E. the income of buyers increases.
Answer: A
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When the goods of competing companies are identical, consumers have no reason to prefer one product over the other, so the demand curve for each manufacturer will be perfectly elastic.
Answer the following statement true (T) or false (F)
Assume the United States is the "domestic" country and China is the "foreign" country. Which of the following might increase the real exchange rate between the United States and China?
A) an increase in the price level in the United States B) an appreciation of the yuan C) an increase in the price level of China D) a depreciation of the dollar
Which of the following is a necessary condition for price discrimination?
a. The seller must be able to divide the markets according to the different price elasticities of demand. b. It must be difficult for one buyer to resell to another buyer. c. Both a and b. d. Neither a nor b.
Firms that are "breaking even" are
A. shutting down in the short run. B. earning less than a normal rate of return. C. earning zero economic profits. D. All of the above are correct.