Which of the following is true of long-run costs and short-run costs?
a. In the long run, changes in variable costs and fixed costs will cancel each other out.
b. In the long run, no costs are truly fixed costs.
c. In the short run, no costs are truly fixed costs
d. In the short run, marginal costs are fixed costs.
b
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A lower domestic price level tends to:
a. reduce aggregate expenditures and lower the aggregate quantity of goods and services supplied. b. reduce aggregate expenditures and lower aggregate demand. c. reduce aggregate expenditures and raise aggregate demand. d. increase aggregate expenditures and raise the aggregate quantity of goods and services demanded. e. increase aggregate expenditure on foreign goods and lower net exports.
In the long run, firms in a perfectly competitive market choose to produce a quantity:
A. that does not cover minimum average variable costs. B. where marginal costs are less than average variable costs. C. that earns zero economic profits. D. where ATC and AVC are at their minimum values.
An economy has two workers, Paula and Ricardo. Everyday they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. ________ has the comparative advantage in computers and ________ has the comparative advantage in shirts.
A. Paula; Ricardo B. Paula; Paula C. Ricardo; Paula D. Ricardo; Ricardo
The real exchange rate is
A. the price of one currency in terms of another. B. the difference in interest rates between two countries. C. the price of domestic goods relative to foreign goods. D. the quantity of gold that can be purchased by one unit of currency.