The above figure shows the demand and cost curves facing a monopoly. If the firm is a profit maximizer, its Lerner Index will equal

Assume that at the beginning of 2012, one dollar could be traded for 5 yuan. If in 2013 one dollar was being traded for 6 yuan, it can be concluded that:

A) the dollar appreciated against the yuan and the yuan depreciated against the dollar in 2013. B) the real exchange rate changed in 2013 assuming PPP holds. C) the nominal exchange rate did not change in 2013. D) the dollar depreciated against the yuan and the yuan appreciated against the dollar in 2013.

Discuss the three fundamental economic questions that all nations must address.

What will be an ideal response?