As existing firms exit an increasing-cost industry
A. the position of the LRAC curve doesn't change, but firms move up their LRAC curve.
B. the LRAC curve shifts up.
C. the LRAC curve shifts down.
D. the position of the LRAC curve doesn't change, but firms move down their LRAC curve.
Answer: C
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Suppose an astronomer discovers gold on the moon. Would this gold add to the world reserves?
A) Yes, we know it exists and we could recover it. B) No, we know it exists but we can't extract the gold. C) No, there are no established property rights over the moon so they cannot add to world reserves. D) Yes, but only if the astronomer is the resident of a developed country with well-established property rights.
If the exchange rate between the United States and Portugal changes from $1 = 1 euro to $1 = 2 euros, then holding everything else constant, the price of U.S. goods in Portugal will decrease.
Answer the following statement true (T) or false (F)