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A bakery has fixed costs of $10 per day and variable costs of $1 per loaf. Its oven can handle up to 50 loaves a day and it is impossible to obtain additional capacity. Sketch the bakery's average cost curve, average variable cost curve, average fixed cost curve and marginal cost curve, all on the same graph.
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y explain whether you agree or disagree with the following statements. “If nominal GDP is less than real GDP, then the price level must have fallen during the year.”
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Given the above trade between the two countries, explain the trade effects on product prices, and factor incomes. Why do these effects occur?
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