Which of the following is an example of a barrier to entry?
A. A firm is open for business only at certain hours of the day, and has its doors locked at other times.
B. The government grants licenses to taxicab drivers, without which it is illegal to operate a taxicab.
C. A newspaper sells advertising space to businesses.
D. A firm is lacking a website.
Answer: B
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Which of the following must be true if a price-searcher firm is operating at the profit-maximizing output rate?
a. The marginal cost of producing the last unit is greater than the marginal revenue derived from its sale. b. The marginal cost of producing the last unit is no greater than the marginal revenue derived from its sale. c. The total cost of producing all units is no greater than the total revenue derived from the sale of the units. d. The total cost of producing all units is less than the total revenue derived from the sale of the units.
By how much does the real, bilateral exchange rate change when the nominal, bilateral exchange rate changes from $1.10/€ to $1.00/€, the U.S. tradable basket from $500 to $600 and the Euro-Area tradable basket from €550 to €580?
a. The real exchange rate rises approximately by 18%. b. The real exchange rate rises approximately by 20%. c. The real exchange rate rises approximately by 3% d. The real exchange rate falls approximately by 3% e. The real exchange rate falls approximately by 20%