A sharp increase in the divorce rate increases the number of lawyers hired to determine divorce settlements. This will
A) increase GDP and decrease well-being in the economy.
B) decrease GDP and decrease well-being in the economy.
C) increase GDP and increase well-being in the economy.
D) decrease GDP and increase well-being in the economy.
A
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Suppose the Fed buys $1 billion worth of bonds and the required reserve ratio is 5%. In theoretical limit, the money supply could
A) decrease by $5 billion. B) increase by $5 billion. C) increase by $20 billion. D) decrease by $20 billion.
If regulators disallow price increases requested by a natural monopoly that is currently earning an economic loss, quality of service will
A) increase rapidly. B) likely fall. C) remain unchanged. D) none of the above.
Another term to describe the normal rate of return on capital is the
A) fixed cost of capital. B) depreciation cost of capital. C) opportunity cost of capital. D) monopoly rent.
When the demand for a good or service limits the quantity that can be sold to an output at which the firm experiences economies of scale,
A. firm is a single-price monopoly B. firm is well protected from competition by a legal barrier C. the firm is a natural monopoly D. there are close substitutes for the good the firm produces