If a firm is an oligopolist, which is NOT true?
A) It must pay attention to other firms' prices.
B) It is one of a relatively small number of firms dominating its industry.
C) It can sell all the units it wants at the going market price.
D) It is engaged in a strategic game.
Answer: C
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If the theory of purchasing power parity is correct, which of the following statements should be true in the long run?
A) The percentage change in the nominal exchange rate equals the foreign inflation rate minus the domestic inflation rate. B) The percentage change in the real exchange rate equals the foreign inflation rate plus the domestic inflation rate. C) The percentage change in the nominal exchange rate equals the percentage change in the real exchange rate minus the sum of the foreign inflation rate and the domestic inflation rate. D) The percentage change in the nominal exchange rate equals zero.
If a market is subject to a positive externality,
A) the demand curve reflecting social benefit will be to the right of the demand curve representing private benefit. B) there is only one demand curve. C) the demand curve reflecting social benefit will be to the left of the demand curve representing private benefit. D) private benefit will exceed social benefit.