A monopolistic firm
A) will never sell a product whose demand is inelastic at the quantity sold.
B) can sell as much as it wants for any price it determines in the market.
C) cannot determine the price, which is determined by consumer demand.
D) cannot sell additional quantity unless it raises the price on each unit.
E) will always earn a profit in the long run.
Question 2 - If all government budgets are balanced, and S is greater than I, then
A) the net international investment position must be positive.
B) the financial account must be positive.
C) the financial account must be negative.
D) the net international investment position must be negative.
E) Both A and B.
Question 3 - Which of the following would NOT be associated with the LATE PHASE of the product cycle?
A) Consumption in high income countries begins to exceed production.
B) Increasing share of output is moving to developing countries where abundant low skilled and semi-skilled labor keep production costs low.
C) Consumption continues to grow in low income countries.
D) There is experimentation and improvement in design and manufacturing.
Question 4 - With a flexible exchange rate, a nation can choose an inflation rate independent of the rest of the world.
Indicate whether the statement is true or false
Question 5 - According to the factor price equalization theorem, if country B is labor abundant, then if country B initiates trade with country A
A) wages and rents should fall in A.
B) rents and rents should rise in A.
C) wages should rise and rents should fall in A.
D) wages should fall and rents should rise in A.
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