Other things equal, the higher the deviations from purchasing power, the lesser will be the arbitrage opportunities
a. True
b. False
Indicate whether the statement is true or false
False
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Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. Which of the following could result in a movement to point d?
A) a decrease in income B) an increase in the relative price of a soft drink C) a decrease in the relative price of a soft drink D) a decrease in the price of bottled water
If a monopolist is producing the quantity at which marginal revenue equals marginal cost, it should
A) continue to produce this amount if it wants to maximize profits. B) reduce output if it wants to maximize profits. C) increase price and keep output unchanged if it wants to maximize profits. D) increase output if it wants to maximize profits.