-Refer to Figure 17-1

question 151

Multiple Choice

-Refer to Figure 17-1.Assume the equilibrium exchange rate is $0.008 per yen at point A.If U.S.consumers decide to purchase more automobiles from Japan,then

• A) nothing will happen
• B) the supply curve will shift to S' and the demand curve will shift to D'
• C) the supply curve will shift to S'
• D) the demand curve will shift to D'
• E) exchange rate will return to $0.008 as soon as the market adjusts.

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Definitions:

ATC

Average Total Cost, the sum of all production costs divided by the quantity of output produced, reflecting the average cost per unit of output.

AVC

Average Variable Cost is the total variable cost per unit of output, which is calculated by dividing total variable costs by the quantity of output.

MC

Marginal Cost, the increase or decrease in the total cost of a production run for making one additional unit of an item.

Long Run

A period in economic analysis where all factors of production can be varied, and no inputs are fixed.