If the price of the capital intensive product rises more than does the price of the land intensive product, then
A) the relative price of the capital intensive product will fall to some point between the pretrade relative prices.
B) demand will shift away from the capital-intensive product, and its production will decrease.
C) demand will shift away from the capital-intensive product, and its production will decrease relative to that of the land intensive product.
D) the production of the capital-intensive product will decrease, but by less than production of the land-intensive product.
E) the country that exports the capital-intensive good will lose its comparative advantage.
A
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Compared to setting a single price, if a firm can price discriminate it
A) makes a larger economic profit. B) makes a lower economic profit. C) makes zero economic profit. D) has no change in its economic profit from when it set a single price. E) might increase, decrease, or not change its economic profit depending on whether as a single-price monopoly its marginal revenue curve was above, below, or the same as its demand curve.
The direct effect of an increase in the money supply is
A) people will spend the extra money, causing the aggregate demand curve to shift to the right and prices to rise, and causing the economy to go into recession. B) people will save the money, causing an increase in bank deposits, causing interest rates to fall, and loans to expand. C) people will save more money, causing a decrease in economic activity and a fall in prices. D) people will spend the extra money, causing the aggregate demand curve to shift to the right, creating an increase in economic activity.