Double markup problems arise when
a. upstream firms have no market power
b. downstream firms have no market power
c. upstream and downstream products are unrelated in demand
d. upstream and downstream firm's pricing decisions tend to decrease the demand for the other product
QUESTION 2A term to describe one currency in terms of another is
a. Interest rates
b. Market price
c. Inflation rate
d. Exchange rate
QUESTION 3Suppose that total cost is given by TC = 200 + 5Q 0.4Q2 + 0.001Q3
a. Fixed cost (FC) is 200
b. Variable cost (VC) is 5Q 0.4Q2 + 0.001Q3
c. Average variable cost (AVC) is 5 0.4Q + 0.001Q2
d. Marginal cost (MC) is 5 0.8Q +.003Q2
e. All of the above are correct
QUESTION 4Double markup problems arise when
a. upstream firms have no market power
b. downstream firms have no market power
c. upstream and downstream products are complementary in demand
d. upstream and downstream firm's pricing decisions tend to increase the demand for the other product
QUESTION 5The purchasing power parity predicts that if US price level rises relative to the Mexico price level, then
a. Dollar value will rise relative to the peso
b. Dollar value will fall relative to the peso
c. There is no effect on either currency
d. PPP predicts price level will normalize in the long-run
QUESTION 6If TC = 321 + 55Q - 5Q2, then average total cost at Q = 10 is:
a. 10.2
b. 102
c. 37.1
d. 371
e. 321
QUESTION 7Double markup problems arise when
a. upstream firms have market power
b. downstream firms have no market power
c. upstream and downstream products are unrelated in demand
d. upstream and downstream firm's pricing decisions tend to increase the demand for the other product
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