The reason that all-you-can-eat restaurants can make a profit is due to
A) the law of demand.
B) the law of increasing relative costs.
C) the law of diminishing marginal utility.
D) the law of diminishing marginal returns.
Answer: C
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In the short run, the lowest price that a perfectly competitive firm will accept without closing its doors is found by examining the average variable cost curve.
Answer the following statement true (T) or false (F)
Which of the following is TRUE?
a. To reduce cannibalization among products, reposition a product so that it does not directly compete with the other b. After acquiring a substitute product, lower prices on both the products c. After acquiring a complementary product, raise prices on both the products d. None of the above
A bank finds itself short of required reserves and therefore borrows from another commercial bank. The interest rate on this loan is: a. zero
b. the prime rate. c. the discount rate. d. the federal funds rate. e. the required reserve ratio.
If the exchange rate is equal to the ratio of the domestic and foreign price indexes,
A) absolute PPP holds. B) relative PPP holds. C) one currency is said to be overvalued. D) one currency is said to be undervalued.