A firm will shut down in the short run if
A. MR < AVC.
B. MR > AVC.
C. AVC < AFC.
D. P > MC.
Answer: A
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When the ratio of domestic prices to foreign prices rises:
A) the real exchange rate depreciates. B) the real exchange rate appreciates only when the nominal exchange rate appreciates. C) the real exchange rate appreciates only when the nominal exchange rate depreciates. D) the real exchange rate appreciates even when the nominal exchange rate is constant.
At a perfectly competitive firm, all of the following is true of the MRP curve EXCEPT
A) the MRP curve is the derived supply of labor. B) the MRP curve shifts leftward when labor productivity falls. C) the MRP curve shifts rightward when the product price rises. D) the MRP curve shifts leftward when the demand for the final product falls.