Summarize the three conditions cited in the text under which a cartel is most likely to succeed. Of these three, which do you think is most important? Why? What will be an ideal response? ANSWER A cartel agreement has the greatest chance of success when the cartel can raise the price of its product […]
Date: September 10th, 2020
Which of the following best describes the influence of successful advertising on the market for aspirin? A) The market demand curve shifts to the right, creating a shortage at the original equilibrium price. B) Individuals’ demand curves shift to the right, but the market demand curve remains at its original position. C) The market supply […]
Date: September 10th, 2020
Domestic currency appreciation will: A) help domestic firms that export and hurt domestic firms that import. B) hurt domestic firms that import. C) hurt domestic firms that export and help domestic firms that import. D) help domestic firms that export. ANSWER C
Date: September 10th, 2020
The difference between nominal and real exchange rates is: A) absolute prices. B) foreign prices. C) domestic prices. D) ratio of domestic prices to foreign prices. ANSWER D
Date: September 10th, 2020
An index of the weighted exchange value of the U.S. dollar versus the currencies of a broad group of major U.S. trading partners is called: A) trade-weighted dollar. B) exchange-weighted dollar. C) dollarization. D) bilateral dollar. ANSWER A
Date: September 10th, 2020
Stabilization of business cycle fluctuations focuses on the long run. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Consideration of the minimum efficient scale of operation would suggest that, to minimize production costs, the market should be served by a large number of small firms when the LRAC curve slopes downward over the relevant range of output. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Assume wages paid by a firm to its workers decrease. What will be the reaction of consumers as the market moves to its new equilibrium? A) Quantity demanded will decrease. B) Quantity demanded will increase. C) The demand curve will shift to the left. D) There will be no reaction by consumers, since input prices […]
Date: September 10th, 2020
The interest rate on Baa corporate bonds is ________, on average, than interest rates on Treasuries, and the spread between these rates became ________ in the 1970s. A) lower; smaller B) lower; larger C) higher; smaller D) higher; larger ANSWER D
Date: September 10th, 2020
Provide a simple definition of the price elasticity of demand and explain why knowing the price elasticity for her product is useful to the firm’s manager. What will be an ideal response? ANSWER The price elasticity of demand is a measure of the sensitivity of quantity demanded to a change in price. To be […]
Date: September 10th, 2020
