Kevin's Golf-a-Rama sells golf balls in a perfectly competitive market. At its current level of golf ball production, Kevin has marginal costs equal to $2. If the market price of golf balls is $1, Kevin should:
A. decrease the level of golf ball production.
B. continue producing the current level of production.
C. increase the production of golf balls.
D. raise the price of its golf balls.
Answer: A
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Use the following graph for a private closed economy (an economy with only a private sector and no international trade) to answer the next question.
The equilibrium level of real GDP in this economy is
A. $250 billion. B. $350 billion. C. $450 billion. D. $150 billion.
Technological progress means that we produce more output with the same amount of inputs
Indicate whether the statement is true or false
There is public dissaving if
A) G + TR > T. B) G + TR < T. C) TR < G + T. D) TR > G + T.
The initial impact of the Fed's open market sale of government securities by the Federal Reserve is
A) an increase in the money supply by some multiple of the dollar volume of the sale. B) an increase in commercial bank deposits at the Fed. C) a fall in the money supply by some multiple of the dollar volume of the sale. D) a reduction of the commercial banking system's reserve deposits at the Fed.