Answer:
Similarities between Free Market Economy and Command Economy
Both economies have similar economic players including consumers and producers, services and goods and money and labor.
Answer:
When monopolistically competitive firms advertise, in the long run they will still earn zero economic profit.
Explanation:
Monopolistic competition happens when many producers sell products that are differentiated from one another and hence are not perfect substitutes
Based on this, the demand curve of a firm in a monopolistic competitive market will shift so that it is tangent to the firm's average total cost curve and this will make it impossible for the firm to make economic profit. The best that can be expected is to be able to break even
This means in the long run, a monopolistically competitive firm will make zero economic profit.
A good example is Hotel which can only raise its prices without losing all of its customers based on brand loyalty and distinct quality differentiation.
Answer:
The minimum wage creates unemployment among young and unskilled workers.
If the price of a product in a market decreased, other things equal, quantity demanded will increase.
There is a tradeoff between inflation and unemployment in the short run.
If consumer income increases, other things equal, the demand for automobiles will increase
If interest rates increase, investment will decrease.
Explanation:
Positive statement is objective and statements are usually based on facts and economic theory. They can be tested.
It is a known fact that the higher the minimum wage, the lower the demand for labour and the higher the unemployment rate. this is because price varies inversely with demand
a tradeoff between inflation and unemployment in the short run is known as the Phillips curve
Normative statement is based value judgements, opinions and perspectives. For example, the statement - social welfare spending in Sweden occupies too large a portion of the national budget - is based on opinion. To some the expenditure might be even too small. There is no economic theory that can be used to determine if this expenditure is too large or small
Answer:
a.total revenue is maximized
Explanation:
Marginal revenue refers to the change in total revenue. Zero marginal revenue impllies no change in TR. Thus, only when TR is maximized will MR be zero before falling.
Answer: Transaction exposure
Explanation:
Transaction exposure, is a form of foreign exchange risk that is faced by the organizations that take part in international trade. It occurs when the fluctuation in exchange rate change a contracts value before it is settled.
It is concerned with the effect of exchange rate changes on individual transactions, most of which are short-term affairs that will be executed within a few weeks or months.
