As perfectly competitive firms leave a market because they are incurring an economic loss, the price of the good ________ and the economic loss of each remaining firm ________
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
B
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In which of the following cases will the total spending on a good decrease?
a. Demand is inelastic, and price increases. b. Demand is elastic, and price increases. c. Demand is elastic, and price decreases. d. Demand is of unit elasticity, and price decreases.
Because of the United States' long-standing trade deficit with Japan, the supply of U.S. dollars in Japan has increased. Which of the following is true about this situation?
A. The trade deficit will continue to increase in size as Japan gains more U.S. dollars and economic strength. B. The value of the U.S. dollar will decrease in terms of the yen, ceteris paribus, thereby reducing the trade deficit. C. We cannot say anything for sure about the trade deficit other than that it exists. D. Trade restrictions on Japanese imported goods are ultimately the only way to reduce the trade deficit.
In which of the following pairs of countries is purchasing power parity more likely occur?
a) Thailand and Malaysia b) China and France c) The United States and Thailand d) The United States and China
For this question, assume that 1980 is the base year. Given macroeconomic conditions in the United States over the past three decades, we know that
A) nominal GDP is always smaller than real GDP since 1980. B) real GDP and nominal GDP would be equal for the entire period. C) real GDP is larger than nominal GDP from 2002 to 2008. D) real GDP and nominal GDP were equal in 1980. E) none of the above