Appreciation of the dollar means that now it takes more dollars to buy one unit of foreign currency.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2Which of the following contracts contain vertical restrictions that limit the transacting parties' choices but create economic value?
a. An agreement between firms to jointly invest in research and development.
b. A franchise contract specifying exclusive territory of operation.
c. A contract amongst competitive firms on an uniform pricing strategy.
d. A collusion between two oligopoly firms specifying individual production.
QUESTION 3When firms exit a monopolistically competitive industry:
a. the average total cost curves of remaining firms will shift upward.
b. the demand curves of remaining firms are increased at each level of output.
c. the remaining firms will decrease production.
d. the average revenue received by remaining firms will decrease at each level of output.
QUESTION 4The exchange rate affects the trade in goods and services between California and NewYork.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5Which of the following is true about vertical mergers?
a. It improves coordination among the individual firms in an industry.
b. It is an agreement among firms to follow a common pricing policy.
c. It increases the competitiveness of the merged firms.
d. It increases the market power of the merged firms.
QUESTION 6When new firms enter a monopolistically competitive industry:
a. the average total cost curves of established firms will shift downward.
b. the demand curve of an established firm is reduced at each level of output.
c. the established firms will each increase production.
d. the average revenue received by an established firm will increase at each level of output.
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