When a nation is economically integrated with trading partners, fixed exchange rates:
A) would be very harmful to the dynamic nature of trade.
B) could promote integration and economic efficiency by keeping transaction costs low.
C) would be the best choice if that nation became the dominant nation in the transactions.
D) would be adequate but have the disadvantage of discouraging trade because of uncertainty.
Ans: B) could promote integration and economic efficiency by keeping transaction costs low.
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The reason why people are charged for an additional can of soda they get from a soda machine, but are not charged for an additional paper taken from a newspaper dispensing machine, is that the marginal utility of an additional:
A. Soda is close to zero, but the marginal utility of an additional paper diminishes slowly B. Soda diminishes slowly, but the marginal utility of an additional paper is close to zero C. Soda increases by more than that of the newspaper as consumption increases D. Newspaper increases by more than that of soda as consumption increases
Which of the following statements is correct?
A) In the short run, if a firm chooses to produce no output (i.e., shut down) its total costs of production will equal its total fixed costs. B) If a firm decides to shut down, its short-run total costs will equal 0. C) As a firm increases output in the short run, the change in total costs is equal to the change in total variable costs. D) A firm minimizes its total costs of production when average variable cost is minimized.