To say people respond to incentives means that people may alter their decisions when the costs and benefits of an action change

Suppose the exchange rate between the U.S. dollar and the Jamaican dollar was $1 U.S. = $40 Jamaican dollars. A beach towel sells for $20 in Miami and $60 Jamaican in Negril

A) Purchasing power parity does not prevail with these prices. B) The U.S. dollar would be expected to depreciate. C) The Jamaican dollar would be expected to appreciate. D) All of the above are correct.

A monopolistically competitive firm will

A) always produce at the minimum efficient scale of production. B) have some control over its price because its product is differentiated. C) produce an output level that is productively and allocatively efficient. D) charge the same price as its competitors do.