"Higher prices always yield higher revenues." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. Higher prices generate higher revenues if demand is inelastic but generate lower revenues if demand is elastic. The effect of a price change on revenues depends on whether demand is elastic or inelastic.
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Since 1999, the capital account has recorded
A) relatively minor transactions, such as migrants' transfers, and sales and purchases of nonproduced, nonfinancial assets. B) transactions that affect the balance of trade or the balance of services. C) statistical discrepancy between the current account and the financial account. D) transactions that affect net capital flows in the economy.
Which of the following statements is correct? With respect to efficiency wage models,
a. their key element is an explanation of why the efficiency (or productivity) of workers depends on the real wage. b. the rationale underlying those models implies that firms will set the real wage above the market clearing level. c. they explain a real wage rigidity. d. all of the above
When a firm produces 1000 widgets with total cost of $2000 and fixed cost of $1000, what is the average variable cost?
A) $2 B) $1 C) $0.50 D) $0.20
The actions taken by arbitrageurs in the foreign exchange markets
a. destabilize foreign exchange markets b. are highly risky c. have no effect on exchange rates d. help assure that exchange rates are equalized across all markets e. are the same as those undertaken by speculators