If, in 2000, $1 = 1.5 euros, and in 2007, $1 = 0.9 euros, which of the following statements would be TRUE?
a. More American tourists will find it cheaper to travel to Europe.
b. More Europeans will stay home as visits to the United States become more expensive.
c. Europeans will import fewer products from the United States.
d. Americans will import fewer products from Europe.
Ans: d. Americans will import fewer products from Europe.
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When a monopolistically competitive firm's demand curve shifts leftward, what happens to its marginal revenue curve?
A) Nothing, the marginal revenue curve is unchanged. B) It disappears. C) It shifts rightward. D) It shifts leftward. E) None of the above is correct because the effect on the marginal revenue curve depends on whether the demand was initially elastic or inelastic.
In the figure above, if a tax is imposed that generates an efficient allocation of resources, then consumers will pay a price of
A) $250 per unit. B) $200 per unit. C) $150 per unit. D) $100 per unit.